Transcripts For BLOOMBERG Bloomberg 20240704

Friday following the jobs reports and the apple drag in the amazon drag. Asia though, we are coming off a little bit, if youre looking for us in aligning. 167 on the benchmark right now. A little bit of a pickup following the china open. Indonesia coming online. Hang seng is flat. Oil is very much in focus today. We are coming off a little bit of highs earlier on. We are getting some upside as far as the shanghai contract is concerned. You are getting a followthrough move in wheat prices in the early goings this monday. 2. 5 , 650 a bushel on wheat. Conversations around no recession, soft landing, no landing. Yvonne yeah, you have u. S. Funding needs versus what the demand for bonds overall being weighed on the back of what we saw last week. One of the worst weeks when it comes to global bonds as well as stocks. For some time now, its the start of something. Certainly want to watch. Especially when you are starting to see china not really emerge from this postcovid recovery in the way people thought. It just goes to show maybe we are still in the thick of this volatility. Rishaad yeah, but you look at this wild ride the last week when you saw bonds, its going to continue because the number of short positions for the highest of 17th months. When you look at the yield curve at all moved up, but of course it inverted less. So the inversion has become less pronounced, as it were. Also taking a look at the impact this may well have. Mark cranfield was talking essentially about this having an impact on what happens with jgbs as well because we have a lot of issuance this week. If theres not enough demand, what happens . His contention is we get a move in. Its all to play for. Cpi data will be crucial this week along with all these bond options. David absolutely. Which cpi number will be key this week . I am looking at china, because if you talk about real yields, that is where it is. If that falls below zero, that is more than a headline. That is certainly incentive to get back into the cdb market. We were talking about this earlier, the short end of this china trade furry treasury curve, we are back to levels, if not the lowest of the year. You are back to levels which preceded the opening back in november. Yvonne if we are going to see more of this deflationary threat come through, is that going to prompt more easing . We are going to have to see more rrr cuts and the like to really stem this. Are we going to see that when it comes to earnings in china . A key thing to watch. Macro wise, u. S. Inflation will be the big test of what we saw last week if we are going to see continuation of that. Were given this mixed report on the jobs frontier we saw friday, mixed with this inflation report, does that solidify that the fed may be done this year . David absolutely. You could make the argument recently that bond markets have two risks to consider. Supply has come back into the fray as another risk to consider. This snapping back of cool relations between stocks and bonds, one had s p and treasuries back to 1996 highs. Stocks had their worst week since last week. Thats a reality we are coming into this week with global backers and movers in terms of momentum. Parts of Southeast Asia are doing well. China still down about. 5 . U. S. Futures are stable. Bonds are rallying somewhat we have the commodity score to contend with as well and ukraine too. Rishaad absolutely. We are looking at toandfro in the black sea, and that has repelled oil prices. The thing is that we see more and more upside. We talked earlier about there being so many short positions when it came to the treasury market. We also have long positions here. This is also reflected in gasoline futures. This has inflationary implications, david. David it certainly does. Michelle bauman, the fed governor of course, talked about this risk. Markets are perhaps opening. She says it is too early for that, guys. Lets bring in Kathleen Hays to remind us of this harsh reality that these rate hikes are still on the table. Kathleen they sure are. Even if you are one of the dovish fed officials who spoke friday, even they were not super dovish but the fed knows it is a debate and they are waiting to see whatever their own view, where they think things are going come if it is being confirmed. Lets start with raphael bostic. He was one of the first fed officials last few months to Start Talking about maybe we should pause. Maybe skip rate hike. Now they have hiked rates again. Jay powell is saying it is all about four numbers. Raphael bostic says he thinks it is clear the labor market is slowing and he does not think they will need rate hikes more. He also sees the fed keeping policy restrictive. Not cutting rates until well into 2024. President of the chicago fed, known as a dove, he says the job market is cooling a bit but it is still extremely strong. Extremely is his adjective. They are not a leading indicator of inflation. And Michelle Bowman, he said more rate hikes are probably going to be needed. What she is waiting to see to prove or disprove that is inflation, whether or not it gets down towards 2 . Does Consumer Spending slow and does she see the job market loosening . She has been one of the hawks, so its not surprising she is looking at that report and seeing strength rather than saying it is time to maybe reassess that. John lithgow was on with us a couple hours ago, former Deputy Director at the imf, longtime fed watcher, one time chief economist at citibank. He thinks the market is flowing and wages are not the problem here. He thinks the fed have to pause in september. I just want to throw that in too to give us one more view. David Kathleen Hays there for us in new york just getting us up to speed on where the narrative is. It should not be a surprise that following the last fed meeting they are getting a lot more talk in terms of guidance and may be pulling the markets back from this victory narrative. As we were pointing out, inflation coming through on thursday will be key in the u. S. Macro wise, that will be key. If you missed it, i think it was bank of america that dropped that in our inboxes on friday that in terms of pce, they do not expect to return to 2 for another two years, the second half of 2025 is their timetable. Inflation coming midweek and this rbi decision thursday as well. A lot to contend with this week. Yvonne yes. Lets get more insights from ig australia. After the whacking that we saw last week when it comes to risk assets i am wondering how you are assessing things right now, especially on whether the fed still has further to go or not. Tony i think it will be encouraged to what they saw friday with the jobs data. Probably a little bit cooler. We saw 197,000 jobs created in july. Prior months were revised lower. But we saw the Unemployment Rate fall to 3. 5 . In terms of how the market has reacted, the bond market had a terrible week last week. We all know that. But there was a focus from the bond market on the signs of cooling. Potentially that was seen differently than how the equity markets were. Potentially we are focusing on the hotter than expected Unemployment Rate and the higher wages numbers which you just mentioned. Something for both camps there. If you are dovish you can look at the slowing in jobs growth. If you are still hawkish, theres enough to be continually worried. David what assumption are you making in terms of a recession down the road . We cannot be two sides on that. One would put a floor on how low yields can go. Tony the problem now is everyone has come around to the view we are getting a soft landing. That is for good reason. Data has been particularly resilient and that is giving everybody the move we are seeing in terms of the consensus now is for a soft landing. With the view that the consensus is for a soft landing, Downside Risk becomes more apparent. If everybody is looking for the data to continue this economic nevada divide which we are currently seeing it suggests we are not looking at what comes around the corner. What comes around the corner . We saw evidence of debt last week. The 30 year bond yield rallying by about 35 point. It could have been the fact it was just the issuance we are seeing, they are running larger deficits. But that probably should not be a surprise. August had very poor the critique. Potentially there was followthrough from the bank of japans meeting. Either way, the fact yields moved so significantly, my personal view is does not matter if bond yields are going higher. But if they accelerate and there is dissipation, thats when markets take notice. We have further issuance coming out this week. We need to see those yields, the tens in the 30s, behave. That will be what potentially i think is the big factor for this week ahead. Yvonne you mentioned the boj. I am just wondering, the Market Reaction has been interesting. It does not seem like it was that big of a shock, but what was your interpretation . Is this just a tweak or the first step for more tightening . Tony i like the phrase ripping thr bandaid off slowl ripping the bandaid off slowly. We are looking towards the end of the First Quarter of 2024. But its an unmistakable exit. The boj cannot go back now. They have to keep moving. Jgb yields moving towards the top of a new trading range. Fair value is probably. 6 ,. 7 . That potentially provides a calming effect for the bond market this week. In terms of my best case, you mentioned inflation coming out in the u. S. And inflation also due in china. I think the u. S. Inflation report is probably reasonably well behaved. I think what we are going to be talking about at the end of the week is the chinese numbers. That signals the chinese economy is obviously heading towards this disinflationary cycle. The headlines if we are going to see at the end of the week, i think that will be more the focus rather than the fact that i think that provides support for the bond market and that is more important in terms with the boj did to what comes next. Rishaad what comes next . 23 rise in the price of crude oil since the middle of june. Thats an Interest Rate hike in many ways. How cognizant do you think Central Banks are of that . It does feedthrough eventually. Tony absolutely. This is the Central Banks worst nightmare. We have got into a point where the Central Banks, the boe, boj, the fed, they are watching the data. But slowly but surely we have had sixweek rises in crude oil, the price of gasoline is increasing wherever you are, in europe, asia, the u. S. If it breaks about this important technical level, it has been at the top of the range for the past seven months, 84. That will start to create some headaches. Not just among central bankers, but people have been trading this range. They have seen this beautifully defined range, down to 63 on the bottom side. If it breaks above there, you get momentumtype accounts getting involved. Theres nothing technically until around 93. So that becomes a very big question mark. My gut feeling is they did not like it below 70, why not have a test of the topside . If we see that break, yes, that becomes a major point of contention for markets as well. David i think it is the first time we have seen somewhat describe the trading range of oil as beautiful. Your other top conviction right now is to be happily new trouble. U. S. Equities, what does that mean . What does it mean to be beautifully nonchalant about u. S. Equities . Tony it is referring to the fact that u. S. Equity markets had a wonderful start to 2023. July finished with a block oster and then the first week of august we are down. My view is once we saw that post cpi rally which took us up to around 4630, we moved to a neutral stance and they are expecting a pullback. If you go back to two weeks ago, what would be the catalyst for the pullback, no one really knew. We saw the boj, it was reasonably neutral, the reaction. But last week we now know what the catalyst will be. It will be the bond market is skittish. There is liquidity and everybody is frightened about how big the issuance will be. Again, im not quite sure. In terms of a comfortable visual, we get a pullback. Thats in line with the seasonals. I would be looking for the s ps to come back down to around 4400 which is where i would look to get in again. Yvonne tony sycamore there. Still ahead, for the first time we are talking continually about what goes on in ukraine. The drone attacks are putting at risk russias commodity exports via the black sea. We are going to take a closer look at what it means for the war and markets. This is bloomberg. David Commodity Markets are looking like this. We are looking at oil, and it is iterations, major ones at least. We are flat and coming off ties on brent and west texas. Wheat seeing more upside and corn up. Events over the weekend giving us food for thought, more upside risk on the supply conversations around Commodity Markets. Yvonne in particular when it comes to soft commodities. Lets get more details about rising tensions and the black sea and bring in Bruce Einhorn for the latest. Obviously this escalation shows signs the war is expanding but what the implications will it have . Bruce it is important to take a step back to how this started. In july the russians withdrew from a u. N. Brokered deal that had allowed ukraine to export grain through the black sea. And ever since then, the russians have been attacking ports like odessa, of the ukrainian ports. The goal is to make it uninsurable for ukraine to send grain to the black sea. The Ukrainian Defense Ministry Posted something on social media over the weekend saying two can play at that game. So over the last few days there have been two attacks on russian ports, or russian ships near russian ports. The risk is a russian port on the black sea, that temporarily closed, the first time that has happened since the russian invasion of ukraine. The number is 15 to 20 of russian oil goes to the black sea, most of russias grain goes through the black sea. In the same way russias goal is to make ukrainian shipments uninsurable, this could also raise insurance rates for russian exports, making it very difficult for the russians to continue that trade. Rishaad bruce, at least there is some sense of trying to get some sort of negotiations going. There are meetings in saudi arabia, instead of a working group over this 10 point plan. But what was tangible from it . Bruce not very much, unfortunately. The russians were not there. The russians denounced it. The ukrainians did have some success in getting countries together to discuss ukraines plan for this. However, china, which was at the meeting, of course has tilted towards russia since the start of the fullscale invasion. Chinas proposal is for there to be a ceasefire before anything else happens. Ukraine and its allies in the west have said a ceasefire would just reward russia by giving them the ability to gain the territory they have had and position themselves to continue the attack later. For the craniums, that is a non for the ukrainians, that is a nonstarter. It does not sound like the meeting will lead to very much when it comes to finding a peaceful solution here. David Bruce Einhorn in hong kong for us. We will have more analysis in oil markets coming up in about 10 minutes. Neil joining us, senior oil analyst. He does prices, just to give you a little bit of a tease. Supported moving forward because it is drawn down inventory levels. Plenty more on the way. This is bloomberg. Grand canyon universitys with local inperson clinical hours makes earning your bachelors in nursing possible from wherever you are find your purpose at grand canyon university. Visit gcu. Edu yvonne some top stories we are following, shares of Chinese Semiconductor maker hua hong have gained on his trading debuted in shanghai. Jumping by as much as 15 before paring back. Those gains coming at the extent of one of the many chip firms to list in mainland china, giving them Public Market access amid beijings ongoing tech war with washington. Bloomberg has learned in point72 Asset Management has grown its Singapore Team by more than 50 since early 2022 to 100. Hiring picked up around the end of last year and accelerated in the last six months. The rising headcount underscores singapores position as a growing hub for hedge funds in asia. And one or movie has topped 1 billion in global and warner bros. Barbie movie has topped 1 billion in global release. It is only the second movie to hit that marker this year after super mario brothers. Barbie took in 53 million in the u. S. In its third week in addition to 74 million internationally. I have not seen it yet, but i have to go see it. What do you think . Rishaad you definitely have to go see it. Well, certainly. Yvonne you will not come with me. [laughter] rishaad i am busy that day. Very quickly, superconductors are back. Fresh evidence that they are ab le to accelerate rapidly processing power. David earnings are coming through. Were going to get into the thick of things as it pertains to japan. It is still not yet as busy in hong kong. I will leave you with a look at energy stocks. Were looking at this group in some ways moving against the grain today. Some of these benchmarks. Were mostly higher on the subsector index. Flat on brent, a little bit higher still on shanghai crude. 2 to the upside. We are bucking the overall weakness. Some of these names are rising quite substantially, adjusting to the move we have seen six straight weeks up until of course this monday. Right. We will talk more about oil with Neil Beveridge joining us in a few minutes. He expects prices to remain supported moving forward. Plus we are headed into the japanese lunch make. We talked about earnings already. Im guessing we have yet to see the full extent of the implications of the peak out of the boj and whether that means higher rates ahead. Probably means it is the pace at which things move higher is the key question t 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. Hi, im jason and ive lost 202 pounds on golo. So the first time i ever seen a golo advertisement, i said, yeah, whatever. Theres no way this works like this. And threw it to the side. 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The plane is not yet on a trajectory to a soft landing within the runway. I feel like weve been getting promising numbers on inflation. I am not expecting this to be a twomonth or a threemonth period. My outlook as we will still be in restrictive territory well into 2024. I still do think there are substantial inflation risks. There was a weird business cycle. It can be a weird recovery. I am hopeful we can pull it off. So far, we have been doing it. It takes a while for the inflationary pressures we have seen for the last 1. 5 years to fully dissipating and get back to 2 . This is an economy putting itself back together but it has been surprisingly resilient. Rishaad policymakers past and present on the feds efforts to reduce inflation. Japanese markets have gone offer lunch break. Digesting some policy comments from their last meeting. The nikkei flat, topix positive. We have a yen which continues to be stable, with the dollar just a fraction higher. The 10 year of course, flexibility. One bank of japan member said that was of course the summary of opinions from that policymaker. Oil is very much here and very much up, is it not, david . David yeah. Over the last six weeks we are up, we have broken out of the recent range, close to testing your to date highs on the benchmarks. We have shanghai crude up too. Within japan, as were heading into the break, oil and Coal Production index is one of the bestperforming equity sectors in tokyo. So there is a oil theme and strength today. Yvonne lets bring in Neil Beveridge, senior oil analyst. Six weeks of gains when it comes to oil prices. How long can this rally last . Neil it can last longer. There was a lot of concern around hard landing in the u. S. And what that could to to demand. Obviously what we are seeing now is a more benign economic environment in the u. S. What is really making a difference is the saudi cuts. They have taken one Million Barrels of the market and extended that through september. When we look at the markets, we see deficit. We think inventories will continue to draw and prices will move higher, certainly in the second half of the year relative to the first half. Yvonne this deflationary picture we are seeing across other commodities, you think oil can convert that . Neil if you look at heart commodities, what we have seen is the impact from Slower Growth in china. What we are seeing the oil side is while consumers in china may not be spending money on properties, they are spending money on mobility. Flights, travel, it is off the charts at the moment. Oil demand in china is tracking incredibly strongly and that is helping to lift the overall demand picture. David just a followup on that, i guess, what is the price at which china is buying the oil . We are getting news that deliveries are getting discounted to parts of the region. Asiapacific, that is. Neil certainly. Russian crude is still heavily discounted relative to brent. You are seeing 15, 20 discount relative to key markers. And china and imports have stepped up imports of russian crude. And china and india have stepped up imports of russian crude. But the bulk of what china is buying will be on international prices. You have seen the saudis raise their official selling price over the weekend, making it more expensive. Rishaad what does it mean for the oil majors in china . We must get roughly a price from the data they do, that they get out in the earnings. Is it better to be downstream concentrated or essentially upstream . What do you reckon . Neil i still think it is better probably to be on the upstream side of things. What we have seen is a pretty muted recovery in china has really weighed on certainly demand for chemicals which is a big part of the earnings of Companies Like sinopec. On the other hand, if you look at the parts of the business performing a bit better, it is more the upstream parts of the business. I think that will continue in the second half. I think you probably want to be more biased towards upstream rather than downstream going into the second half. Yvonne obviously with opecplus extending production cuts, do you think there is a level they are targeting in terms of price, and can they keep control and that . Neil saudi needs about 80 a barrel to breakeven in their budget. I think the cuts they have made surprised a lot of people given the market. To cut another one Million Barrels a day was very proactive from saudi. So i do think the really want to shore up a pricing floor in the market. 80 is what they are looking for. Based upon what we are seeing, the average is maybe around 90 in the second half or perhaps even higher. David we are getting initial signs as well, and just to bring in the u. S. Part of the conversation here, initial signs that the economy might be doing better than what a lot of people were expecting as recently as three months ago. Are you seeing any signs u. S. Demand is picking up from your end . Neil u. S. Demand has been a big topic of conversation through the year. What we are seeing is refining runs actually pick up yearonyear over the summer through the driving season. Demand has been pretty stable this year in the u. S. Flat across most of europe. It is really china leading the way with about 1. 5 Million Barrels a day of incremental demand growth yearonyear with Global Demand somewhere around 2 Million Barrels a day. It is chinas recovery from covid driving the bulk of demand. We are certainly not seeing weakness in the u. S. Market and demand remains pretty firm across the board. Rishaad just got a headline concerning cpi which came into slightly less than expected in thailand. All this plays out in global inflation. I wanted to talk about oil looking medium to longer term with electric vehicles and when do we see peak oil, and how is that already affecting skewing the oil market, in your view . Neil i think there are two big debates taking place in the oil market. One is the energy transition. If you look at china, we now have electric vehicles that account for one third of all new vehicle sales and that is growing as well in the u. S. And europe. We expect oil demand to peak somewhere around the end of this decade. But at the same time we have also got an industry really pulling back from investment. Levels in real terms about half of where they were in 2013, 2014. And that underinvestment in the industry could lead to a tighter market over the next three, four years, particularly given signs we are starting to see a slowdown in shale. We could see a period of higher prices before we see peak demand before prices come down in the very longterm. Yvonne overall then, you are saying investment still increasing by 50 lower than peak levels . So longerterm you are still seeing that there is a chance that were going to see supply shortages for how long . Neil over the next three to four years, we could see prices move materially higher. The investment we are seeing remember, u. S. Shale is that 10 Million Barrels a day. Saudi arabia was added over the last decade. That has come to an end. You think about what is driving growth from here, it will be down to opec. If opec were in charge of the market, they will want to see Prices Higher than what we have seen historically. Rishaad neil, good stuff. Neil beveridge there joining us. Checking in with u. S. Futures, having a look at these as we have a lot going on, not least the cpi report coming up. Teachers indicating a strong open giving asia a lift no doubt. At the moment also the bond market is absolutely front and center. This is the deal at the moment with regards to that. After that payroll report we have a bit of relief. Of course there could be a calm before the storm. We have the size of the regular sales of new treasuries being boosted. All of that at the moment is being factored into what we have with that in version slightly narrowing. David yeah. That takes us into the labor market which led to perhaps swings in the 10 or 30 years. A big swing down in yields. The chicago fed president , a perfect segue, says its important for policymakers to look at those productivity numbers before focusing on growth. Austin told us the u. S. Job market remains strong, as confirmed by last weeks data. It was pretty much what we expected. The jobs number is whatever it is plus or minus 120,000 a month. So theres no point quibbling over numbers. The job market is cooling a little to a balanced level, but it is still extremely strong. That is the strongest part of the economy by far, how low the Unemployment Rate is, and people can get a job if they want a job. 120,000 plus or minus still way more than needed. So it is still tightening, is it not . Lets say 100,000 just from population and what is coming into the workforce. Its stronger than that. It has been the surprise of the year, of the six months, that all of the people that folks thought were gone from the labor force never to return, a lot of them are coming back. When the job market is as strong as that, you have seen Labor Force Participation rise back to levels we had not seen for several years at least. So that has been great. That is the strongest part of the economy. None of us want to be out of a job so it is a good thing. But what about the wages . These numbers, 4. 4 yearoveryear i believe it was. That does not sound like something consistent with getting to 2 inflation overall. The way i view it is two things. One, you cannot say anything about wages until you actually know what is happening with productivity. You have productivity numbers that were strong for the quarter. That is very noisy. If you have strong productivity growth you can have wage growth and is not and it does not grow inflation. The other thing about wages is they are not a leading indicator of price inflation. They are backward looking. Wages move more slowly. When things happen we get shocks, prices move and then we get wages. When we see what is happening to wages today, this is kind of an amalgam of a bunch of stuff already occurred. Yvonne austin goolsby, chicago fed president , speaking with david westin. Coming up, traders bracing for a big week when it comes to asia earnings with the giants including toshiba, softbank, and alibaba all reporting. 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. David we are just slightly above water on the benchmark. About a point, two points. Maybe that has to do with large caps moving the needle. Volumes are above the 30 year average but below last weeks levels. Were hovering above averages. Fairly uneventful but we might get a catalyst as far as earnings and that ip the next one to watch as we look ahead to what could be next. Just to give you a sense of what is coming up, pick your horse. Alibaba, softbank coming out with earnings, toshiba also due out. Were about halfway through the japan earnings season now and before we know it we will be in the thick of things in china. Rishaad absolutely. Our breaking news editor in tokyo, we have the likes of alibaba and softbank, toshiba. What are you watching out for in particular and how would you characterize the earnings season thus far . Gareth thus far we are coming into the last egov it here in tokyo at the moment. Last week of it here in tokyo at the moment. Pretty spectacular progress has given them a greenleaf. This week today, the big one is toshiba. The consensus issuing toshiba is probably back into the blackness quarter. Also you cannot talk about toshiba without gic and the enormous 15 million 15 billion buyout. Any hints of what is going on will be super interesting to watch. Yvonne softbank is the big one too. You talk about being in the black, are we likely to see that with this company now . Gareth yeah, softbank, probably japans mostwatched company. They are coming out tomorrow. Given the take back market, some of their Big Investments look like they will be better. Consensus issuing softbank will also be back in the black this quarter. The other big thing was softbank was the arm ipo is coming up anytime soon. They are looking for a valuation between 60 million and 70 billion on that one. Anything that gives us a sense of direction on that deal as well will be very much in the spotlight tomorrow. David now to china. Alibaba, there are so many things we can talk about here. Whether they are focused on this restructuring, guidance obviously on the back of what this economy looks like. What are you watching closely there . Gareth thats right. Alibabas profit looks fairly solid. The consensus is for a low singledigit percentage growth from them. The regulation issues have been a big thing for the moment. There are coming off that big fine just recently. There is where they have been seeking speaking with regulators which apparently will put a positive on their outlook for the near future. Yvonne gareth allan with a preview of what to expect this week. Coming up, Benjamin Netanyahu backs off from a controversial overhaul of the judicial system following unprecedented protests. Our exclusive interview is next. Did you know you can get someone to shop for you . With stitch fix, it couldnt be easier. I share my style, size and budget. And they shop just for me. My shopper sends me stuff i feel good in. I keep what works, and send back the rest. Stitch fix. David israeli Prime Minister Benjamin Netanyahu is backing away from his planned overhaul of the judicial system and instead working only to change the way judges are actually chosen. Previous proposals had sparked a large antigovernment protest movement, the largest in the nations history. He spoke exclusively to bloomberg that is change in strategy. I am absolutely sure that israel will come out stable and successful and democratic, at least as democratic, in my view more democratic. I do not think we are going to tear the country apart or have civil war. Right now what you are seeing is the natural conflict between opposing views have not yet mashed but they will mash. Do you support your Central Bank Governor . Sure. I appointed him. Will you back him for another term . I have not talked to him yet but i will. But i would say i have rigorously guarded his independence and independence of the central bank and that will continue to be the policy. I will talk to him. You would not believe this, but we have just not had the opportunity to discuss that. When you talk to him will you ask him to stay on . Possibly. I want to think about it. What are you thinking now . I think he has been an exceptional centralbank director and it is a possibility i will have to talk to him about. One of your ministers called him a savage for raising Interest Rates. Well, my ministers and our hectic parliamentary system can say anything. But it is a fact that we have never intervened with the independence of the central bank and we will not. In fact, i think i passed some laws, or corrective additional laws that safeguarded the independence of the central bank. I do not want the government broaching in on what the central bank has to do. So do you support the Interest Rate hikes . I leave that decision to the central bank. I have had several centralbank directors, because i have been in government a long time. I think in a few months, i will probably be more time in as Prime Minister than anyone in the western world for the last halfcentury. So i have had a lot of centralbank directors to talk to. I always talk to them in a padded room, absolutely soundproof, that we can hurl at each other whatever we want, but when i come out i always give backing the central bank director. It would be a pretty powerful message to the markets given the divisions and the turmoil if you were to ask him to stay on. Could be. That is a consideration. I will consider it. But do you agree, that would be a powerful message . The powerful message is the independence of the central bank. And i think the choices that i have made in bringing in centralbank directors, whether it was stanley fischer, and after him, the current centralbank director, i think people see that we choose well. Rishaad the israeli Prime Minister Benjamin Netanyahu speaking with Francine Lacqua in jerusalem. We have pakistans former Prime Minister imran khan being unable to contest elections due by november after being convicted of corruption. Police arresting him saturday after islamabad sentenced him to three years in prison. He is denying any wrongdoing and will challenge the decision in a higher court. At least six people have been killed and armories looted as conflict erupted again in india. Police say they launched raids over the weekend to recover stolen arms and ammunition. Rioting there since may has killed more than 150. Parliament will debate a noconfidence motion in their Prime Minister in its failure to stop the violence. Support for a west African Military operation to reverse the coup in nigeria has wavered as a deadline to reinstate their ousted president arrived on sunday. Senators in nigeria have urged regional leaders to prioritize diplomacy over a military operation. The junta has resisted all calls to restore democracy and warned against any foreign interference. Yvonne all right. Markets, not much conviction as we start off the trading week. We are pretty much flat on it comes to asian stocks. One thing that is certainly seeing bright stocks is oil and oil stocks. Were slightly up. Some big names like soil up 4 after result oil markets marking six straight weeks of gains not just when it comes to opecplus extending production cuts. We have also been hearing from the black sea as well, that is keeping oil elevated this morning. David we are also looking at hua hong, individual movers right now. The stock is debuting onshore on the star market and that is moving up. It was up a lot more in the opening minutes. We are seeing pullback now, down about 7 on that. Within the big movers right now, it is really tech that is keeping their respective markets afloat. Well, the taiex index up by one. The kospi is flat despite most falling. Tencent down 1. 3 , keeping the lid on hong kong. Global macro movers, we talked about those green spots on your screen to give you an indication of what is moving beneath. Plenty more ahead, including data coming out of indonesia. Growth numbers are set to come out today. Haslinda it is almost 11 00 a. M. In singapore and shanghai. Welcome to Bloomberg Markets asia. I am haslinda amin. Rishaad i am rishaad salamat. Asian equity benchmarks edging to the upside as fed officials debate for the rate hikes ahead of this weeks inflation report, and Holding Onto Gains as oil after ukraine attacked a russian ship in the black sea. Israels the Prime Minister tells us exclusively he will not pursue the entire judicial overhaul he originally planned. Plus, violence is flaring in northeastern india in response to earlier clashes. Haslinda a lack of conviction in the markets as we kick off the week. The jobs data out of the u. S. We have easing unemployment, but wages remain elevated. What does it mean for the fed . Chances are we will need more data before the next moves. We have developments out of ukraine as well. Taking a look at the benchmark, the msci asiapacific index has been swinging between gains and losses. The p and, also higher, but csi under pressure. Oldman says it is losing out to japan when it comes to capital attraction. It is seeing capital going to japan in the largest amount since 2017. We have the benchmark in new zealand under pressure as well. In the fx space, dollars swinging between gains and losses as well. The renminbi is not supporting despite the fact that pboc fixed the yuan higher by 300 pigs, and it has been fixing higher since mid june 300 pibs, and it has been fixing higher since mid june. Brent crude has been higher for six consecutive weeks on the back of concerns about supply and developments in ukraine not helping. The black sea, those drone attacks not helping sentiment. Rishaad lets have a look at the open in bangkok. We have the latest inflationary cpi coming in weaker than anticipated, and they are looking at about nine story with regard to falling food and fuel prices, but this is from the higher based cpi. July was up 0. 3 as opposed to 0. 6 . We are expecting july to move inflation below 1 for the rest of this year. There is the price action. We do have the benchmark on the way up, nifty futures indicating a lift to the upside. The rupee just seeing a bit of strength, but not much. Certainly what we are also looking at here is pushback with regards to what could happen with the rbi as it meets later this week. Traders are pushing back rate cut bets because of a spike in food prices that could send inflation above the Central Banks tolerance limit. Lets turn now to the u. S. Central bank and Federal Reserve governor Michelle Bowman saying they may need to raise rates further to restore price stability. Jill disis is in hong kong and joins us now. A soft landing, or is inflation likely to take up gains . Jill i think Michelle Bowmans comments fuel more of the speculation on whether it is indeed the case the fed may have to return to hikes later, if we see further pressure on inflation in the u. S. In terms of the debate over soft landing verses whether that means we will continue to see a rise in inflation is all down to the bidenomics spending plan. What does this spending plan mean for the economy, helping the u. S. To avoid recession . Her comments are coming in the wake of some of the payroll data we saw last week. Some of that indicating there is some case there is continued resilience in the labor market helping us to set off the idea of a deep recession, but you saw some of the wage growth that is temporary expectations about inflation. What the big take away from what bowmans comments were is that we are still datadependent in terms of what the fed will do. We are expecting this pause come september, but it will depend on what this shows us the coming weeks and months. Haslinda and data has been mixed. Cpi on tap this week. What is it likely to show . Jill what we are expecting in the headline gauge is 0. 2 year on year increase. That would be coupled with june, the slowest back to back growth in 2. 5 years or so according to the consensus estimate right now. The underlying gauge the fed looks at, 4. 8 increase. Youre looking at some elements of cooling inflation. Maybe we will see that feedthrough into the coming weeks. At this point, Bloomberg Economics expects this data to show us the fed has reasons deposit its rate hiking cycle again has reasons to pause its rate hiking cycle again. Bowman is definitely more hawkish as opposed to the doves on the idea of an extended pause, but we are expecting this is the beginning of Additional Data to show there will be a pause come september. Rishaad on top of all this, what sort of forecast now have they got . It is almost as though a week ago we had mission accomplished, inflation is linked, but it is not that simple, is it . Jill it is not. At this point, the forecast for longer views on the economy have been getting more optimistic about averting the chance of recession in the u. S. For now, and that continues to be part of the narratives and what the expectation looks like as we head into the end of 2023, but if it does come with the wage growth data from last week telling us igniting the fears about whether or not the fed can hit that 2 target it has set in 2024. There have been expectations on how much this means that even if there is an extended pause in the rate hiking cycle, how much that means rates have to stay higher for longer. That is contributing to this uncertainty. It is what we have been talking about for several months now. What does the fed strategy look like . We have had so many different fit Officials Say a lot of it comes out to what the data will show, and that will continue to be the case from here on out. Haslinda you have got to wonder whether the fed really knows that strategy. It is data dependent, so we will have to wait and see. Bloombergs jill disis in hong kong. We have breaking news. Kkr seeking to take space tech firm ohb private, and is set to do so with the founding family. That is according to people familiar with the matter. The u. S. Bank firm is set to announce monday and offer for 30 of freely traded shares in a deal that would value it at about one billion euros, including debt. We will continue to monitor that story as it breaks. For now, back to markets and get perspective insights from robert hoffman, head of Investment Counselors in south asia at citibank. All of the data coming out is pretty mixed and you have to wonder what it means for the fed. Robert they are going to have to parse through a number of different data points. I think they want to leave open the possibility of potentially raising rates even slightly higher than where they are today, though we think that is nothing more than show at this point. It will not materially alter the path the u. S. Economy is on. It is pretty steady. The fed does not necessarily want to speed that up faster. Theyre comfortable with the pace but want to make sure it continues. Haslinda it has been wild for the bond market and throw in the options we are seeing this week, what would be the impact . Robert we are expecting with cpi dated this week, we are looking at data release by data release. We are trying to figure out on a monthly basis where we are. The core numbers this week we think are likely to come in slightly harder than expected. 0. 3 month over month, and last month we saw the Energy Prices increase in the form of oil. If you look at the core inflationary numbers, though should fall more. We think it will be slightly weaker than consensus, but you are starting to get granular data. The other big existent effector is what is happening in china with deflationary pressures we are seeing. They are not exporting inflation to the rest of the world, which is helping Central Banks around the world coordinate policy. Rishaad what do you make of this correlation coming out where stocks are falling, bonds to the downside of late. Where does that leave you when you advise clients . Robert when we have been talking about this for the better part of this year, which is last year the traditional Asset Allocation strategy failed us. It was the first time in many years where stocks and bonds have fallen on the same markets. This year has been the opposite story as we expected, so our biggest advice to clients right now is it is impossible to look at these markets in isolation. Look at bond market the one day and look at equity markets. Our best advice is to make sure that your overall allocation is checked. The 60 40 portfolio has come back into vogue this year, so our recommendations to clients are to follow that strategy, make sure your allocation is filled up, and from there we can make tactical decisions. Rishaad do those tactical decisions mean looking outside the u. S. . There is a bit of a fomo rally. Does that give it legs, and if there is core value, do you look in other places . Robert exactly. You do not necessarily need to leave the u. S. Entirely, though the value gap outside the u. S. Is more attractive than it has been the past 20 years. Even within the u. S. Markets, looking beneath the surface of the magnificent seven, if you look at small and Midcap Companies trading at a 30 valuation discount compared to their peers, it is bound to the u. S. Market. It takes diligence to figure out how to access those parts of the market. Outside of the u. S. , u. K. Shares are looking attractive again on the valuation discount. And if you look at japan, structurally, we think there have been dramatic changes over the course of the past 18 months that we think now is the time to be buying dips in japan. We are advocating areas that are off the beaten path, even though the magnificent seven are taking a lot of the headline share right now. Haslinda is it risky to buy into small and midcaps when it is still uncertain what the fed will do . We had bowman saying rate rises could be coming in. Robert if you look historically at the beginning of bull market cycles, which we think we are at the inception of right now, the best time to be invested in small and midcap is right now within the cycle. While the rhetoric is we could be seen slowdowns, the valuation of equity markets happens faster than those announcements can come out, so we are still supportive. We do not think now is the time to be going massively overweight, but so many investors are massively underweight the sector and it is time to bring it back to neutral. Haslinda and the dollar . Robert this is the story that keeps on giving. We are likely at that inflection of the dollar. It will be structurally different difficult for the u. S. Dollar to restructure from these levels. It will be really challenging for the u. S. Dollar at this point in the cycle to continue its streak of outperformance. It is likely past the peak now. Rishaad robert, what about if you look at china it is not really what can i do to get people to invest in china . Japan is getting all the headlines, but you are going towards rich valuations. Robert you are getting them to valuations. Fundamentally, the growth and valuation is tough because it is a rearward looking metric, but what has changed in japan is the most exciting to us. Going back to china, which is the topic on the tops of every investors minds right now, what is going to change and the catalyst that breaks the market loose . It is a wellknown metric, which as you will not see a Big Government stimulus policy, but accumulative fact of a number of policy procurements will stimulate the market. The question is how quickly they can coordinate this. You will see some positive green shoots in the market towards the year end, but the real breakthrough you will see in Chinese Markets will happen into the First Quarter or the first half of next year. That will have to come from stimulating the economy where the consumer. For the consumer bid we are not overly optimistic that will be a positive number, but it will force more rhetoric from the government. Haslinda i do not mean to be a party pooper, but could investors be underestimating the risk we talk about how there is not likely to be a recession in the u. S. , but we know there is a lag effect for the next 12 months. Might not see a recession today but you might see it down the road. Robert our view is that we have skirted the overall when we think about the vshaped recession where all sectors in the u. S. Dip at the same time, we have likely avoided that given the policy in place and the slow and gradual increases by the fed and their willingness to stand by their policy. Had they missed at any step and said they will step back policy, the fed might have had to be more forceful on the other side. What we see more likely is something we see a rolling recession, which is different pockets underneath the u. S. Economy in recession at different times. Right now, it is manufacturing, Companies Selling off inventory. That will likely reverse by the early part of next year. We will have companies rebuilding inventory and Services Beginning to slow. Rishaad robert hoffman, from citi private bank. We have breaking news concerning paytm. The founder owns a significant stake and will buy 10. 3 of the stake in the company from antfin. Sharmas shareholding of paytm will now beat 14. 3 . This company is one of 97 in communications. Staying with india, and we will be hearing it back to what the reserve bank does with monetary policy. We will preview that decision with hsbc later on in the hour. When you see all the people who work at shriners hospitals for children. You might see everyday people just doing their job. But to me and other kids, they arent just receptionists, therapists or doctors. Theyre superheroes but these superheroes are only able to help all of us kids because of the monthly support of people just like you who empower their abilities, so we get the care we need to live our lives like superkids. Because people like you have said, yes, now i can play football because of people like you, i can play the violin. And i can walk. And when you call the number on your screen right now and give your monthly support to help kids like me, youll be a superhero, too. When you say yes to giving just 19 a month, only 0. 63 a day, well send you this adorable love to the rescue® blanket as a reminder of all the kids youre helping every day. Its the monthly gift from superheroes like you that give children like london the care they need. Thank you thank you when you go online to loveshriners. Org right now with your monthly gift youre more than a supporter. Youre my super hero please call or go online now, if operators are busy, call again or go to loveshriners. Org to give right away. Your monthly gift helps us be superheroes too. Haslinda welcome back with Bloomberg Markets asia. The situation in the black sea are raising concerns about commodities and freight rates. Those prices are creeping higher on the escalation of the ukraine war which we saw over the weekend. The baltic size index higher for a second day after jumping the most in two years. Shipping rates jumped tenfold during the record height of the pandemic, contributing to the inflation we are still trying to fight today. In terms of the commodities space, brent crude is currently at 86. 17. New york crude is also flat right now, and wheat jumping by 2. 5 . Rishaad we have our cultural reporter here now. We saw this hot conflict between russia, ukraine, and the black sea. Russia has set its attack on the ship will not go unanswered. That is right. Over the weekend, we saw ukraine launch sc attack on a russian tinkerer and a naval ship. This is in response to russias ongoing assault over the past several weeks on ukraine. Several ports have been targeted the past weeks. It also follows the dissemination of the grain deal, which was allowing the United Nations and turkey to ship grain through the black sea. Haslinda russia is a top wheat shipper. What impact is that having on the price of wheat . Keira both russia and ukraine are two of the worlds biggest exporters of wheat, so it is crucial to global food security. This morning at the open, we saw wait wheat futures jump up 25 , and prices are still high. We are certainly seeing them higher. Traders as well are probably still feeling jumpy at this point. What i have heard and what i heard this morning. Haslinda thank you so much for that. Bloombergs keira wright. Plenty more ahead. Keep it here with us. This is bloomberg. Rishaad that is the treasury market in focus. We have all important inflation data, this as we have significant extra options taking place, which could put further measure pressure on this bond market which has had a wild ride last week. It is something which has been digested by bond markets. You see the chicago fed president saying that it is up to policymakers to look at productivity marker productivity numbers before focusing on wage growth. We spoke to Austan Goolsbee and he said that the job market remains strong. This following last weeks nonfarm payrolls data. Is pretty much what we expected. Just remember, the jobs number is whatever it is, plus or 120,000 a month, so there is no point quibbling over numbers. The job market is cooling a little to a balanced level, but it is still extremely strong. That is the strongest part of the economy by far, is how low the Unemployment Rate is, and people can get a job if they want to get one. To that point getting tight, just to keep up with the people coming into the workforce, so it is still tightening, is it not . That is right. Lets say 100,000 from what is coming into the workforce, so it is stronger than that. It has been the surprise of the year, of the six months that all of the people that. Were gone from the labor force never to return, a lot of them are coming back. When the job market is strong is that, you have seen the Labor Force Participation rise back to levels we have not seen for several years at least, so it has been great. That is the strongest part of the economy. David what about the wages . These numbers were 4. 4 yearoveryear. That does not sound like something consistent with getting your 2 inflation overall. Austan the way i view it does two things. Number one, you cannot say anything about wages until you know what is happening with productivity. We got productivity numbers that were strong for the quarter. That was noisy, but if you have strong productivity growth, you can have wage growth and it does not generate inflation. The other thing about wages as they are not a leading indicator of price inflation. They are backward looking, wages move more slowly. When we get shocks, the prices move first and then the wages, so when we see what is happening to wages today, this is an amalgam of a bunch of stuff that already occurred. Haslinda that was chicago fed president Austan Goolsbee speaking with bloombergs david westin. In the markets, we have the csi 300 index under pressure, dragged down by property developers, extending losses on the back of record china local state bars missing the shortterm debt payments. Also some people saying china is running out of time when it comes to supporting its developers. Flip the page. Take a look at this gangbusters debut, hua hong searching surging as much as 5 and it is the largest listing in the apac region this year alone. Hua hong currently up by 4 . Plenty more here. Keep it here with us. This is bloomberg. To finally lose 80 pounds and keep it off with golo is amazing. Ive been maintaining. The weight is gone and its never coming back. With golo, ive not only kept off the weight but im happier, im healthier, and i have a new lease on life. Golo is the only thing that will let you lose weight and keep it off. Who loses 138 pounds in nine months . I did golos a lifestyle change and you make the change and it stays off. soft music people are always asking me two words come to mind for me. One is responsibility, the other is purpose. Its just so inspiring to do research that impacts human lives. Stand up to cancer has been a critical partner in advancing research for cancer. Cancer Research Saves lives. So please help us fight in this battle against cancer. Rishaad the china benchmark is just heading for the lunch break. Thats check on what has been a lackluster session. We have got that 0. 70 5 move to the downside for those equities on the csi 300. Perhaps we are looking for a lift this week after we get the monthly inflation news. If we get the negative print, it could mean the country is back into deflation, and that could be the Tipping Point for policy easing. In turn, that would give them that much needed mettle to get some serious momentum because we have had a lot of talk, but we have only seen piecemeal action thus far. We have stocks not expecting a boost as strong as the ones we saw for the cpi print when it was last in contraction in 2020 because of covid. This is what it looks like, hshares also down 0. 25 , lower for the hang seng for the half last hour of trade before the morning session comes to an end. And tokyo is seeing the topix gaining and the nikkei flat as we go into lunch bid what are we getting as they come back now . Haslinda pretty lackluster, but this is a market that has gone gangbusters. Im consolidation we are seeing, and the nikkei 225 is up a bit. We had goldman saying japan is winning more capital from china for the First Time Since 2017, so it is looking upbeat for the japanese market. The yen at 142, currently down versus the u. S. 10 year yields still at 0. 63, so lets see what the appetite is for intervention from the boj. Rishaad lets have a look at the israeli Prime Minister, Benjamin Netanyahu, because he has caused a lot of street protests, and now he is backing away from a planned overhaul of the judicial system and said he is working to only change the way the judges are chosen. Previous proposals sparked off the largest antigovernment protest in the countrys history. He caught up exclusively with our Francine Lacqua about his change of strategy. P. M. Netanyahu i am sure it will come out democratic. I do not think we will tear the country apart. I do not think we will have civil war. What we are seeing is the natural conflict between two opposing views that have not yet meshed, but they will. Francine do you support your Central Bank Governor, who is well respected internationally . I and pointed him i appointed him. Francine would you back in for a second term . P. M. Netanyahu i would consider it. He has guarded his moves at the central bank, and i will talk to him about it. We have not had the opportunity to discuss that. Francine when you talk to him, will you ask him to stay on . What are you thinking now . He has been an exceptional central banker, and that is a possibility that i will have to talk to him about. Francine one of your ministers called him a savage for raising Interest Rates. My ministers in our hectic parliamentary system can say anything, but it is a fact we have never intervened with the independence of the central bank, and we will not. In fact, i think i passed some laws or corrective additional laws that safeguarded the independence of the central bank. I do not want the government encroaching in on what the central bank has to do. Francine so do you support the Interest Rate hikes . I leave that decision to the central bank. I have had several Central Bank Directors. In a few months, i will be more time in as Prime Minister than anybody in the western world for the last halfcentury, so i have had a lot of Central Bank Directors to talk to. I always talk to them in a padded room, absolutely soundproof, that we can hurl to each other whatever we want, but when i come out, i always give it back to the central bank director. Francine it would be a pretty powerful message to the markets given the divisions and the turmoil if you were to ask him to stay on. It could be. That is a consideration. Francine do you agree that would be a powerful message . The powerful messages the independence of the central bank, and the choices i have made in bringing in Central Bank Directors, whether it was stanley fischer, and after him the Current Central Bank director, i think people will see that we choose well. Haslinda israeli Prime Minister german netanyahu speaking exclusively to bloombergs Francine Lacqua in jerusalem. Top political stories we are tracking. The former Prime Minister was seen in cambodia on saturday to celebrate the birth of the nations leaders son. The visit was the same day that thanksin announced he would postpone his return to the country. Wang yi has invited the top eu diplomat and his delegation for a visit. Wang says the visit will allow for preparations to be made before a Leaders Summit this year. And support for west African Military to reverse a coup in niger has wavered as the deadline to reinstate ousted president hamed bazoum arrived on sunday. For now, senators in nigeria have urged regional leaders to prioritize diplomacy over military operations. The junta that seized power in july have refused all calls to restore democracy. Rishaad we will have a look at pakistans former Prime Minister, imran khan. He is unable to contest elections in november as he is accused of corruption. Lets get more with our reporter. He is in jail, but we also have movement on the elections as well. Yes, so imran khan has been jailed for two or three years now. It happened unexpectedly over the weekend. Basically, the keys were him hiding his proceeds from selling state gifts, which has been dealt with on every state had in pakistan, but there were disclosure issues, and he has been contesting elections. His legal team will be filing review petitions today, but we do not know what will happen. On the other hand, we have the governments five and 10 year ending this week, so the government will announce a dissolving of parliament sometime this week, and they will also announce a caretaker government for three months that will take over as administration. It is expected in three months time, the new Government Election will happen, but there is a new caveat that could delay elections until next year. The government has just completed a census process but it is not entirely completed. It will take four to six months more, so you may see a delay in elections as well. Haslinda it was a surprise verdict. You have got to wonder what it means for khan itself himself. Does that mark the end of the road for him . Faseeh a lot of analysts telling us that it is the end for his party for now, at least. That is until is coming back to power. He has seen a lot of crackdowns on his party since he was briefly arrested in may. Two of the Senior Leaders have gone on to make their own new Political Parties. A lot of the Senior Leadership has left his party, so it remains to be seen. One thing is clear that he is not the force that he used to be. Haslinda thank you so much for that. Bloombergs Pakistan Bureau chief, faseeh mangi. Coming up, hsbc expects Indias Central Bank to hold its key rate. A preview of the rbi decision with a chief india economist is coming up. This is bloomberg. With everything you have on your plate, earning your degree online seems. Impossible. But at grand canyon university, we specialize in helping you fit a masters degree in education into your busy day. Your Graduation Team led by your own gcu counselor provides you with the personal support you need to succeed achieve your goals with a plan and team behind you find your purpose at grand canyon university. Visit gcu. Edu rishaad a look at the premarket and we are seeing a restoring of the nifty futures bid we have got a lot of news to digest here as well with regards to india because at least six people have been killed in a fresh corruption of violence in the northeastern part of the country had of a noconfidence motion on Narendra Modis government. Lets get over to our Senior Editor in mumbai, menaka doshi. What is the latest . Menaka that is another deadly incident of violence, as you pointed out, that took place over the weekend. These are continuing ethnic clashes between the Majority Group in manipur in Northeastern State of india against the tribal group. This has now been ongoing since at least may. There is the much longer history to the differences between these two groups and several other tribal groups are also involved. The death toll so far of this current phase of violence that has been going on for several weeks has been over 150 people. One of the most worrying aspects of this violence has been the attacks on women, specifically sexual attacks. We have also seen a number of Security Forces and armories looted over the last several weeks. That continues to be another concerning feature about this violence. Manipur is a state governed by the party of Prime Minister Narendra Modi who first commented on this issue last month after a video became public of two naked women being berated and molested, and subsequently raped and assaulted. This week, we expect that the opposition Political Parties effort to bring a noconfidence motion against the government will be discussed in parliament. The government does have numbers on its side, but this would be a show of solidarity by the indian opposition parties. Haslinda unfortunate developments. Do stay with us. Another story we are following, Reliance Industries saying it expects its Financial Services unit to be listed soon. Lets bring our conglomerate reporter. Reliance agm is known for its big project announcements. What are you expecting from this latest annual report . Mukesh ambani is following the legacy of his late father. His father used to use this agm gathering to announce big bank projects for the future. And Mukesh Ambani is also using the same platform. It has launched a new smartphone at a new cost to users at these agms. The most important thing is that this is taking place after the emergence of geofinancial from reliance. And it is expecting International Shares of its business to be listed, and the new entity is expected to unlock value for shareholders and give them an opportunity to be part of the newer platform. What we should keep in mind is the listing should happen before the 31st. Menaka what did Mukesh Ambanis shareholders say about the other new business, which is the green energy business, and if there are any updates on retail and the digital or Telecommunications Business . Sanjai there are a lot of industry and analyst reports. One is that ambani will profit this commission and since 2021, he opted to focus on fighting against the covid pandemic. To answer your question, he aims to provide affordable Green Hydrogen as an alternative to traditional fuels. And his company is said to gradually replace the carbon engines in the future. The company will start the production of battery packs and scale up more integrated findings about its Manufacturing Business by 2024. Rishaad thank you for joining us. Menaka doshi stays with us. We look at one stop on the move, and it is concerning a change in the structure within. One 97 is the owner of paytm. This after the founder sharma is set to buy a stake in antfin. He will be increasing his holding of the company to 19. 4 . Markets are on the way up as far as india goes. Lets look at pushback by investors and traders on bets that an Interest Rate cut may be pushed to next year. We have a spike in food inflation. Pranjul bhandaris chief india economist at hsbc. We have got spike up, but a lot of it is down to inclement weather and Interest Rates have no bearing on that. Pranjul that is right. The and india, food and fuel makes up 55 of the inflation basket, so you cannot ignore what happens on the food front. What we have right now is a vegetable price shock, which on its own is not struggling not troubling because in two or three months, a new stock of vegetables will come in, so that is not our main worry. Our main worry is cereal, a rise in wheat. We have issues there. Monsoons have been patching, the stocks from last year are not very high, and if prices will rise the way they have, down the line, we will have a serial threat, and that is the part i am looking out for. The serial inflation worry is there, and the best thing we can do is keep rates on hold, not change stance, and generally sound hawkish. Rishaad do you think there is something structurally going on in the economy because of the change in grain price you have talked about . Pranjul we have two structural issues coming together. One is Climate Change. Climate change has made grains more volatile the harder to create, and that is a problem, but to counter that, we have a government which is extremely proactive with very nimble supplyside steps, buying, selling, cracking down upon borders, and also importing very quickly anything that was in shortfall, so for now, the government with its nimble supplyside steps has been able to overcome the problems that Climate Change has caused in terms of food inflation. There could be some issues going ahead as grains become more unpredictable. Menaka do you expect or do you see anymore moves being made by the government to take care of the serial concern you have . We already have a host of moves regarding bands on exports, but anything further . Pranjul that is a good question. I will put it down to three parts. Vegetables are not a problem because new stock comes quickly, and then we have seeds which many people come in. It is the cereal that is a concern. The government is trying all kinds of things, from banning exports to limiting taxes, and my sense is they are trying everything, but the shock we would not know right now is if el nino will extend towards the end of the year. If there were to be a shock, then my sense is that it is hard to control because cereal is one of the main things that people consume. It takes a lot of persistence and it stays in the system for six months, so that is the big shock which the government needs to fully overcome. Menaka how do you see the reserve bank approaching any kind of rate cut here on . Expectations it would happen at the end of the year were beginning to be unrealistic and now it might be pushed out to the middle of next year. Pranjul you have a point because food inflation remains uncertain at this point, and then you had all kinds of commodity price increases from oil to metals to Agro Products by 5 to 15 , and if that continues, that is likely to have a bearing on core inflation too. Remember growth remains good even now, especially in urban, so you have Commodity Prices rising. You have urban growth which is good, food inflation out there, everything that should make you worried on the inflation front, so i am not surprised the rate cut expectations have been moved to later. In fact, it is not the base case, but let me put it out there that if we have a serial price shock, cereal price shock, then we will have this rate hiking conversation. Haslinda is it fair to assume the rbi is expected to revise its inflation target and growth target, even . Pranjul that could happen, but my sense is they will not do it immediately. They will do it at the next policy meeting and the reason is there are so many moving parts. It is vegetables, oil seeds, grains, and we will have a better sense of numbers at the end of august. Therefore, they will not change their inflation had line numbers. They will make some tweaks across the borders. They probably will not touch headline numbers yet. Haslinda thank you so much. Pranjul bhandari from hsbc. The Indian Markets have been open for six minutes or so, muted gains for the benchmarks. We are tracking paytm, which rose as much as 11 as the founder plans to raise at stake. That stock is reflected in one97 comms, currently up 8. 7 . Keep it here with us. This is bloomberg. Rishaad this is a look at korean stocks. These are superconductor related stocks and what we are witnessing is another come back. This week we saw them soaring by the same margins, and that fizzled out, so that has remained because of a claim of a breakthrough in this technology. This is to help computers with internal temperatures as they process, something that would have changed the game. And you could actually set ambient temperatures according to the scientists, but at the moment, companies have been looked at closely because people are now seeing perhaps this breakthrough in that technology as promised. Lets look at what is going on with china pharma related equities, on their way down. It is down to this campaign on anticorruption. It has expanded to more hospitals and hospital officials are under investigation. The health index was down 30 , the worst performing benchmark. We have a probe at one hospital due to a serious violation of laws and regulations. It is down to this probe on corruption, selling these stocks. Haslinda dragging down the csi 300 index. In the broader market, trepidation, a lackluster performance. We have the msci asiapacific index pretty flat. We are keeping an eye on the data out of the u. S. To seek what the fed will do next when it meets. And keeping an eye on crude after six weeks of increases. That is it from Bloomberg Markets asia. Bloomberg daybreak middle east and africa is up next. This is bloomberg. Wake up, achievers. Youre making the most of every hour of your life. Except the hours that youre sleeping. So why do we leave so much Untapped Potential on the table . This is a next level bed, for a next level you. My circadian rhythm is kicking your circadian rhythms butt its not a competition. I know, but im still winning so, it is a competition. 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®. Back in the day, sneaker drops meant getting online to wait in line. Now with xfinity mobile. We get the Fastest Mobile Service and can get the freshest kicks asap. I got this. Save hundreds a year over tmobile, at t and verizon with the best price for two lines of unlimited. 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