Transcripts For BLOOMBERG Bloomberg 20240703

Good morning and welcome to daybreak australia. We counting down to asias major market opens. David im david in hong kong. Stoxx are set to face headwinds, futures are pointing lower amid the u. S. Holiday. Rba decision today, the bank is expecting to hold its key rate. Its governor phil lowes final meeting. On the housing crisis threatening to engulf surviving developers with about two thirds of the 15 major private builders in default. Breaking, alan joyces is stepping down early as qantas ceo after a bad few weeks for the company. Public anger over a series of scandals. We will get to that story later in the show. In the meantime, breaking news out of south korea, all start with gdp numbers, its not important. Whats inflation are the whats important on the Inflation Numbers. Gdp,. 9 . Just this than it takes you to. 6 . That is the gdp story in line with estimates. What is coming in hot right now is the inflation print which looks absolutely nasty on face value. Up 1 on month on month. Headline cpi, year on year beating estimates. Excluding food and energy, strip those out any get to the core. 3. 3 . Im checking my bloomberg. I will correct myself im wrong but it seems that there is a 1 print on cpi that is actually is that a correct number . Anyway, at 1 that is the hottest inflation print going back not dosed a few years, all the way back to 2016 to get a 1 month on month increase. There you go, thats nasty. Lets see what Market Reaction is like. Im guessing the market will not like that. Haidi really outstripping forecast. Weve seen Higher Energy costs, but food for thought when it comes to the bok. Weve got data out of australia. Pmi numbers, the composite number, the final reading for august. In contraction territory. Better than the previous reading. Marginal improvement. The final reading for august, 47. 8, better than previously but firmly was in contraction territory. This goes into rba decision day. All but one economist weve spoken to expect no major surprises for the last meeting. Thats right and it points to the issue facing the rba because youve seen weakness coming through in the pmi numbers. Households are pessimistic even though you see strength coming through in the labor market, the expectation is we will stay on hold for a Third Straight meeting, the key rate at 4. 1 , near an 11 year high for borrowing costs in the country but the question when he got a hold is what sort of messaging will come through . Td securities has been mapping out different scenarios and saying there is a 60 chance that it comes in neutral but the remaining 40 is split between two different scenarios so we could see a hawkish bias and then we would see a firmer dollar coming through. Bond yields inching higher and then a dovish messaging, dollar retreating, yields going lower. One of the risks is chinas economy and the malaise we are monitoring. When you look at Market Sentiment equity futures looking mixed. Certainly keeping our eyes on chinas property sector because Country Garden is facing a key debt test. More than 22 Million Dollars in Interest Payments are due by wednesday at the latest. David, with u. S. Markets and futures online, that is where investors are concentrating attention today in asia. David its the first indication because of the long holiday. We started out soft and it looks to be momentum coming through was positive. Nine out of the last 10 days, we should be going for day 10 of gains. We are seeing something coming through, early goings s p futures. Bond futures are indicating we might get yields pushing higher at the japan open. What you want to watch, new york crewed is at 86. Closing at 90 at brent but that goes into the nasty inflation out of south korea where you have food in transport costs leading those gains there. Let me look at my screens, 3 in food and almost 4 on transportation month on month, that will be painful. We will see what the market reacts like we were thinking skinny jeans would go away. It was not inflation that did it, skinny jeans stay unfortunately. Inflation remains a problem suffice to say. Whats uglier on the margins . Lets get more reaction from our next guest who was saying markets have been too pessimistic. Lets see what he makes of this, shane oliver joins us, head of Investment Strategy at amp. Great to chat with the when you look at this shocking read on inflation from south korea is a reminder that there is upside risk when it comes to Central Bank Policy . It is not wrong. The figures were august. Weve seen a rebound in oil prices, gas prices we know of some food prices. That may have been effective. The estimate was for a higher number,. 6. It came in worse at 1 as weve heard. Its a reminder that inflation is a threat. By the same token, the broader picture is global slowing or cooling, labor market pressures starting to ease. We saw that on friday with the payroll numbers, u. S. Job openings. And of course in australia there is a risk here that the reserve bank has gone too far we have a high risk of recession. If the Economic Conditions remain one of slowdown, potential recessions, that will take pressure off inflation even though it is not going to go as high. Haidi i felt more calm reading your note saying there is cause to be optimistic or if you are going to be pessimistic you will get it wrong when it comes to timing low points into the market. Tell us about your strategy. I guess what im talking about in terms of optimism, the history of the market, ive got a book in my bookshelves on the history of share markets. They trend up over time, trying to get the timing right is difficult. In terms of the timing, bringing it back to the shortterm, were going through the august, september october. Slight negative, not as bad as it mightve been. Seasonal weakness is still with us. Theres a whole budget factors which could cause volatility with strong gains that we saw in the u. S. Going into july. Right now im feeling cautious as we know inflation risks are still there. Central banks have eased tightening but they still have a tightening bias. I dont think theyre going to raise rates in september. But they have a tightening bias. Recession risks are there and we got Government Shutdown risks for the u. S. Later this month. Going into october. I suspect volatility will remain high but i would see that is a buying opportunity because inflationary pressures are easing and that will take pressure off Central Banks. David im looking at that book, 100 one years of global investment, the triumph of the optimists. If inflation does it has returned, if it remains elevated what does that mean for returns in the next 24 months in the equity market, what is your view . If it remains elevated around these levels above target that is a constraint for equity markets. Youve got to face the fact that weve gone through many decades until the pandemic where inflation and bond yields traded down in that supportive equity markets. Inflation does not come back down again as markets are pricing in, that would be a negative surprise for investor markets. That is a risk, certainly a risk. David how are you viewing china . Well, not as negatively as everyone else. Cautious. David thats not hard to do. Scenario one is a lot of commentary worried about that. The other scenario is where they are more restrained, like japan through the 90s and 2000s. I would be more concerned about that one. I cannot see chinese authorities sitting by and letting their markets implode. Thats not the way china does things. It does not want to go back to the bubble economy just like japan in the 1990s. That says that they are on the side of not dashing enough. David mm. Yeah, yeah, i think we just lost the audio there. Haidi head of Investment Strategy at amp. Hoping we can get shane back because ive a feeling he was going to Say Something when it comes to china. We could use all the insight we can get at this point. You know, it really does feel like that the options for chinese leadership when it comes to what they can do to boost the economy, to fix the property sector are looking limited but lets bring shane back read we sort of lost her audio in the middle of telling us about china and i suppose my next question is the implication for australia, how do you invest around that rba decision day, but these economies that have big exposure to china. Are you feeling constructive . Unfortunately my sound device went off. Im feeling constructive. In china there are concerns. Longer term slowing down, cooling population, slowing productivity growth. I dont see them allowing things to collapse and we will see more stimulus. If we get more stimulus, that is resources stocks and positive for the australian dollar. Its not going to be a big scenario like 2008. The year 2008. By the same token i think it will be a positive scenario for Australian Resources stocks. David thank you as always in on that positive note, we will leave it there. We will see whether you are here to correct. At of Investment Strategy at amp. Just ahead, we ask why these new investments in largescale solar and wind projects are falling and we look at moves which could help turn the tide. Plenty more ahead, this is bloomberg. 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. When you automate sales tax with avalara, you dont have to worry about things like changing tax rates or filing returns. Avalarahhh ahhh i was told my Small Business wouldnt qualify for an erc tax refund. You should get a Second Opinion from Innovation Refunds at no upfront cost. Sometimes you need a Second Opinion. [coughs] good to go. Yeah, i think ill get a Second Opinion. All these walls gotta go ah ah ah id love a Second Opinion. No. Im going to get a Second Opinion. With Innovation Refunds, theres no upfront cost to find out. So why not check like i did for my Small Business . Take the first step to see if your Small Business qualifies for the erc. David the clock is ticking for Country Garden to avoid what would be its first default. The builder has until wednesday to make Interest Payments on the dollar know weve been talking about for weeks since we are counting down to the end of the socalled 30 days. There is confusion whether it is today or tomorrow but the window is closing quickly. Charlie is with us, our bureau chief in shanghai, to get us up to speed. Is there indication they will make the payment . Charlie good question. The clock is ticking, the company has 22 million worth of coupon due today and tomorrow. If the Company Defaults, it will be the worst than the one by evergrande in 2021 given Country Garden has four times more projects then evergrande. Will the Company Defaults . We do not know, but what we know is the company has tried very hard to avert a public default. Two days ago the company extended the payment of 3. 9 billion local currency note. Yesterday they wired denominated bond coupon. The company is trying to avoid such an event, but bear in mind the company is one of the worlds most indebted. The company has a total of 187 billion totals liability including a couple billion dollar notes maturing this year. A couple of days ago the Company Released its interim report and posted 7 billion loss for the first half of this year. In the Earnings Statement the company warned that if financial performances continuing to deteriorate, it may not be able to meet financial obligations. The company is facing severe uncertainties that may make it, you know, hard to become an ongoing concern. That is exactly what he said. The dollar bond market and the securities traded at the stress levels despite a sharp rally in the shares thanks to good news about mortgage easing over the weekend. The Company Shares are trading below the peak and bonds are trading at . 10 on the dollar. Haidi that was bloombergs charlie with the latest on Country Garden. We are watching that but also checking corporate stories. Bloomberg learned while way and chinas top chipmaker have built an advanced seven nanometer processor to power their latest smartphone according to a tear down of the handset conducted by tech insights. Its the first to utilize the most advanced nanometers technology. Much remains unknown including whether it can be made in volume were a reasonable cost. Alibabas Cloud Division is weighing a profit round to chinese head of its ipo. Theyre working on a cloud Intelligence Unit fundraising that could raise 2. 8 billion dollars. Investors include telecommunication companies. You can get a roundup of the stories you need to know in todays edition of daybreak. Terminal subscribers can find that dayb or on the bloomberg anywhere app. Customize your settings so you get the news on industries that you care about. This is bloomberg. How can you sleep on such a firm setting . Gab, mine is almost the same as yours. Almost is just another word for not as good as mine. Save 50 on the sleep Number Limited Edition smart bed. Plus, free Home Delivery when you add a base. Shop now only at sleep number. 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. Haidi qantas Ceo Alan Joyce is bringing forward his retirement with vanessa set to take over from wednesday. Lets get more from karen in sydney. A lot has been happening. Karen this is been a sudden morning. People were not expecting this for months. He stepped down early but the months this has come after has been tumultuous for joyce and qantas. He has had to defend qantas in front of a senate hearing, to defend his pay which it millions of dollars as australians are struggling. Qantas was sued by the consumer watchdog here which accused qantas of selling tickets on flights that had been canceled without consumers knowing about it. This comes in the context of a costofliving crisis that has seen record inflation, people struggling and people are upset that the brand they have been able to count on has been gouging them on prices. David so suffice to say these challenges do not go away just because alan joyce steps down early. What is next . What are the shortterm hurdles they need to get through to fix the optics . Karen the big thing is restoring customer confidence, wanting people to fly qantas, wanting people to trust in the brandt and all eyes from investors to consumers are going to be on Vanessa Hudson, cfo taking over from joyce. The pressure will be on and when joyce made a statement announcing his early departure he did say he was doing it so that qantas could focus on renewal. That is going to be a big watchword Going Forward. David thank you so much, karen lee, Global Business editor. One of stocks to watch will be the airline in over 30 minutes. Apart from that a brief look across markets. Its quiet coming off a long weekend. Lets get to your top stories. Starting with byd, dominating the ev market on the chinese mainland and european managing director told bloomberg they are planning to announce a factory location in the region by the end of the year. They also presented the first prototype of the future lineup at the munich motor show. Weve got good performance in china. Europe is our strategic market and we want to try, we want to connected with the customers here. Its a great opportunity. And then to have this conversation, we love to be here. And hope every customer in europe can meet us in munich. David renaults will resume talks with investors for the listing of its ev unit here. The ceo told bloomberg they have received positive feedback during some 35 meetings before the summer. He adds a separate listing will allow them to reduce costs as much as 40 in its next generation of ev. Right, just a look at markets as promised, lets start things off with what is not happening across currency markets as we point out, or coming up on a long week, thin trade, exacerbated moves. Rba decision coming out. We talked a lot about data coming through emis out of europe. Services print out of china in just over two hours from now, the private survey for the month of august right now. In terms of the yen a couple of things, 10 year bond option today will get the results, what demand looks like. In give or take four hours from now around 11 30 right after the markets come back online for the afternoon session. That is a look at the macro moves. Equity markets, the story Tuesday Morning is nine days of gains in the last 10 days, looks like thats it. Weakness in the market, more than 1 to the downside. Futures were flat. We will see what happens, volumes have been extremely thin globally. 2030 depending on the benchmark, lighter compared to the 30 day average as you can see. One other thing to watch as we make her way into the trading session, we will talk about the korean inflation print in a moment, the nasty comeback in inflation, 1 month on month. We will unpack that for you and if we get policy implications out of bank of korea which is held rates unchanged for three or four meetings, i forget. They always struck a a a they cut the door open for future tightening as with most Central Banks and out imagine that would be the case when we get the rba. Keeping the inflation story alive and predicated on the threat. We will talk more about that. Markets are softer, a look at japan 30 minutes from the open, this is bloomberg. This is bloomberg. Good morning its an amazing thing when you show generosity of spirit to someone. And you want people to be saved and to have a better life, then you dont stop. We have been able to reach over 100 Million People impacted and affected, and at risk of hiv. The rocket fund takes all of the work that were doing, all over the world, and looks at the most effective ways, to get resources to them, to get services to them. The idea that we have saved five Million Peoples lives, its overwhelming. Its everything. Haidi youre watching daybreak asia. A check on markets coming down to the opens. The top of the next hour. When theme is what happens in chinas property sector. Country garden, one of the Biggest Developers is facing a debt deadline. This putting it perspective because yesterday a lot of the story was signals of government support. Optimism that Country Garden would need to key deadlines. Dollar note is in focus because weve got coupon payments with more than 22 million due by wednesday. We saw a tick up in shares and when you look at the bar at the bottom, the lines in blue are shown Trading Volume hit a record, more than 1. 7 million shares changing hands. That is one of the key focuses ahead of the trading open. When you look at equity futures we are pointing to a mixed session in hong kong, china has been shut. Futures coming online fairly steady as we get underway. Ecodata is the other key watch and we had Inflation Numbers and davey were so shocked but Inflation Numbers were bounding past 2 for the bank of korea coming in at 3. 4 percent gains in Consumer Prices versus 2. 3 in july, a huge take up. Energy prices perhaps. It does complicate the path ahead for the bank of korea. Concerned by Household Debt but retaining hawkish tilt. They have not shifted policy since january. This meetings will be closely watched but not just bank of korea because it is also the rba. Haidi bit is the governors last meeting is the head of the rba in a few hours. The sevenyear term drawing to a close. Paul allen takes a look back at his leadership through extraordinary economic events. His seven years as reserve bank of australia governor could be categorized by one word, inflation. When he got the job in 2016 inflation in australia was barely above 1 . In his first appearance in front of a Parliamentary Committee he had to defend the obsession with how to stir it. Weve not been inflation nutters, we recognize varying inflation is inevitable and appropriate. Cpi did not vary barely touching the lower bound of the rba two to 3 target band until the covid19 outbreak when inflation dipped below zero. The Global Pandemic was a black swan event no predecessor had to deal with. After cutting the cash rate to a record low, he uttered the words that would contribute to him losing his job. We are likely to be at the current level for an extended time. He put a date on it thing conditions were unlikely to be met before 2024. Australians took out cheap mortgages is the Property Market roared back only to be wrongfooted. So much for 2024. By 2022 inflation was redhot in the rba embarked on the fastest pace of rate increases in australian history, 400 basis points in 14 months leading to awkward questions. Do you accept that you induced australians to take out mortgages on the basis that Interest Rates would not rise until 2024 and you think you them an apology . Im sorry if people listen to what we said and acted on what we had said and now regret what they had done. So that is regrettable and im sorry that that happened. His hopes of getting an extension were dashed. Defeating inflation passes to his deputy and incoming governor michelle, the first woman to lead Australias Central Bank paul allen, bloomberg, sydney. Haidi the rba is set to keep rates unchanged at his final meeting. Lets bring in our economic reporter. It does the cyclic the end of the tightening cycle, like we are at the peak . We are close to the peak and the hurdle to raise Interest Rates is high. This is christ to the upside. Economists are expecting one more rate hike, a rate of 4. 35 , most likely in november after weve seen Third Quarter inflation reports. David hopefully correct for the sake of people who have taken up mortgages thinking rates were not going to go up. What does the new era look like here . We are looking at a big change. Rba will do fewer Interest Rate meetings, eight instead of 11. After every single meeting, there will be a press conference. Hopefully there will be more interviews and speeches from report board members. There will be a governance board. Vr we are expecting appointments. There will be a Deputy Governor appointment because michelles vacant now. There is a chief appointment we are expecting. A lot of changes in inflation will come back down in the rba will not have to raise Interest Rates again in the focus will then be on how to include the culture of communication at the bank. Haidi as we await more transmission how is the economy responding . It has been mixed so if you look at the jobs market we had job vacancy numbers that ensured a second straight monthemploymen the 3. 5 and 3. 7, the lowest its been in 50 years now. And on the other hand if we look at , that has been tepid. And a lot of spending is going to international holiday, not reflecting in australian data but retail sales have really suffered a lot and that is the biggest thing. People who have mortgage debt are really hurting and really thinking about their budgets. David our economics reporter ahead of the rba in about if im getting my math correct five hours from now. As we approach that, at the same time if i did my math correctly the bloomberg terminal, check that out for clients. That should be opening up ahead of the decision, noon hong kong time, im transcribing that into where i am. Check that out. Another key event this week is the g20 summit. Its a chance for the government to become a key player in geopolitics has china struggles with sluggish growth. Our colleague reports out of mumbai. The gabon india, home to 1. 4 billion people. More than half under the age of 30. That includes the largest number of jobless use in the world youth in the world. India has the third highest number of but it drags at the bottom. The widening gap between the richest 10 in the bottom 50 makes india one of the most unequal countries in the world. Democratic englishspeaking india has sought to become major economy but china has made boulder moves to become five times bigger. Why might this be india . One big reason, it is not china. Policymaking from beijing remains hard to predict. Western countries are wary of chinas technological clout. International companies are seeking supply chain diversification. Indias government is spending record amounts on infrastructure and offering production incentives to key industries. Other reforms range from a sales tax to a world leading Digital Payment system. Bullish investors in stock market highs have burnished the india story. Prime minister modi hopes that will set the stage for his reelection next year. It will test whether indians wie buying the india shining story or not. Haidi coming up next, chinese solar manufacturer gcl tack is close to opening its first battery after talks with saudi arabia. We hear from their ceo. This is bloomberg. This is bloomberg. 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. Its easy to get lost in investment research. Introducing j. P. Morgan personal advisors. Hey david. Connect with an advisor to create your personalized plan. Lets find the right investments for your goals okay, great. J. P. Morgan wealth management. When you automate sales tax with avalara, you dont have to worry about things like changing tax rates or filing returns. Avalarahhh ahhh flu shots at cvs are pretty. Flex. Schedule one for you. Or the whole crew. Plus, theyre free. Really . Healthier is getting a flu shot on your schedule. Cvs. Healthier happens together. Haidi fresh investments in australia fell by 42 but increasing demand for power purchasing may turn the tide when it comes to that. Lets bring in Renewable Energy analyst here in sydney. This is not the direction we should be trending in. Corrected good morning and yes you are correct. In the first half of the year investments are slow. We are seeing more policy from the government. We will hit 82 Percent Energy penetration by 2030. Currently we are at the 20 mark. We are slowing down with the investments because Market Conditions are challenging. Transmission buildout has been slow. Projects trying to connect to the grid are delayed. Inflationary pressures are pushing the cost of wind and solar up and this is creating a hard environment for investors and developers in australia. We are seeing stable demand from a law of corporates in the form of power purchase agreements, reflected in the investment numbers in the last half. If we look toward the last quarter, investments hit 3 billion, a three year high. Haidi what corporations in terms of procurement . Is it a meaningful impact . Australias power purchase market is diverse and we see a range of corporations that have ambitious net zero targets. Specific Energy Targets and they need clean power to get them there. Growth has been stable but the key players that we are seeing our utilities and energy retailers, the likes of agl and Origin Energy which are publicly earned as well as government backed companies. These utilities and to offtake energy directly from renewables and so it to smaller corporates. If we look at the corporate side of things the big players are microsoft and they have publicly announced that they want to source 100 of energy from a new rules. We see industrial players that have modeled that they need four gigawatts to power elementia him. They have 0. 23 so they have a long way to go. Haidi what does it look like when it comes to investment in Australian Renewables . As we inched closer to the 2030 target and even 2025 which corporates are targeting to electrify by. We think investments will start to rebound if there is more demand. If we look at the impact this would have on the Broader Energy transition its an interesting trend. Research from bloomberg has found australian into invest 8 billion on average from now until 2050 if we are to stay on track. This is a Huge Investment for a country like australia and if we look historically investment has been around two or 3 billion per year on average. We are looking at an increase in investment. Australia has a long way to go. Corporations have to work in collaboration with governments and Renewable Energy developers if we are to meet these ambitious targets. David fantastic work. Our Renewable Energy analyst out of bloomberg anywhere. Going through their research, i need to brush up on my chinese. We spoke green energy. Gcl tech, one of the biggest makers of silicom is in talks with saudi arabia about opening its First Factory as they hope to extend energy ties behind beyond oil. Operations could start as early as 2020 five as demand for solar continues to grow. Have a look. Because of our cost advantage , emerging Technology Manufacturing capacity could increase the market share of silicon and the revenue will increase under stable conditions. David before we talk about china, i want to ask where your outlook is for Global Demand for solar products . Im very optimistic because of august this year the entire markets manufacturing capacity and utilization rates are quite high. It will reach 450 gigawatts. It pessimistic estimate will reach 300. David can i ask about competition in your main market . Are there too Many Companies . At this point because last year in the year before the pv Company Yield was high and return on investment may be enviable, so it is not surprising that manufacturers and their process of diversification will alter the industry. It is green enough and the profitability is high enough so this is not surprising. In the next two to three years, the competition, larger skills and differentiation regarding talent reserves, technical reserves and r d reserves, the concentration of companies in the industry may converge in the future. The number will go down. David the vast majority of revenues and sales, your main market. Is china your future or are you looking outside of china to expand commercial and revenues . From the current point of view we have gone pretty far in the middle east including cto, weve made several visits to saudi arabia and qatar, places we want to speed up implementation. The experience can provide us enough output and reserves. This is a good alternative. David speaking of the middle east a few months ago when we spoke to you you mentioned considering or thinking about putting up your first plant outside of china. Can i ask if youve made any decision on the plant . If so, what is the target capacity and what will be the start date of any operations . Now we have a team of about one dozen people and we are communicating with saudi arabia and the royal commission. We have submitted our Site Selection and Feasibility Study report. In the meantime our Company Registration is underway its progress is slower in asia compared to china and hong kong. We very much hope that we can get the land and start preparations at the end of the year which is the winter of saudi arabia because the summer is too hot. The temperature can reach over 60 degrees celsius during the day, too hot for construction. We wanted to avoid the summer and start the project as quickly as possible. David that was gcl Technology Joint ceo joining us exclusively of course. Speaking of this transition to clean energy will be speaking with Industry Leaders from this years gas tech conference in singapore. Catch those interviews in the coming hours at the times that you see on your screens. Meanwhile, lng workers at chevron australia have threatened two weeks of nonstop outages at the major plants from september 14. Partial strikes could come as soon as thursday. Workers have served notice to the energy giant after clashing over pay. A twoweek shutdown would lower australian output by over one million tons. That story on top of other stories we are tracking ahead of the open of major markets. Plenty more to come, this is bloomberg. Haidi lets get to some geopolitical stories. China criticize President Biden strategy toward basing as doomed to fail. The ministry of state security says the current american focus is no different from its previous approach of engagement and containment. The criticism comes less than one week after you notice u. S. Secretary visited beijing. Russian president Vladimir Putin has rejected turkeys efforts to restart a landlocked deal which would allow ukraine to ship grain through the black sea. He told turkish president that he will not consider the reviving of the deal unless west removes obstacles to their own exports. Wheat prices have remained volatile after russia left the deal in july. The u. S. Says kim jongun is expecting leader level talks with russia providing weapons to secure moscows war in ukraine. The White House Security council is calling on them to cease arms negotiations which they say are actively advancing. New york times reports kim intends to meet with putin to discuss weapons. David now just ahead of the open of major markets, we will see if we are correct. We thought the rba was going to be top of mind today with a Rate Decision and then that korea read of inflation came through and it gives us food for thought and perhaps other big stories we are sleeping on. This is a dynamic we might see play out so keep your eyes on that because the entrance costs, these are the sole sources of inflation surge. Not to say that is not a problem but it is something that applies to every other economy out there on top of korea, so watch out with this as it shows up in terms of that across that market. Markets opens my tower, coming up on this hour or next hour at daybreak asia is earning seasons rampup, we speak with ken about his highlights. Gas tech in singapore is underway in 2023 and we speak with indonesias upstream oil and gas regulator. Plus the market opens, it is busy the next 60 minutes. This is bloomberg. Endless hardie® siding colors. Textures and styles. Its possible. With james hardie™. So, youve got the power of xfinity at home. Now take it outside with xfinity mobile. Its possible. Like speed . Its the Fastest Mobile Service around. With the best price for two lines of unlimited. Only 30 bucks a line per month. Thats hundreds in savings a year when you wave bye to the other guys. All on the most reliable 5g network nationwide. You really shouldnt walk out the front door without it. Switch today at xfinitymobile. Com. So. I know you and george were struggling with the possibility of having to move. Hows that going . We found a way to make bathing safer with a kohler walkin bath. A kohler walkin bath provides a secure, spalike bathing experience in the comfort of your own home. 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We had that super hot south korean inflation print earlier, a lot of corporate headlines to watch for. These potential strikes in australia over these talks with chevron as well as qantas. Allen joyous out two months earlier than expected hoping for a clean slate but of course with Michelle Bullock taking over the rba a lot of legacy issues to contend with. I think you summed it up very nicely we have ecodata coming out of japan and qantas and decisions from the m rba and property concerns in china, we have markets coming online now for japan, korea and australia. At the start of the day that focus coming in with the nikkei here. We are a little higher as we get trading underway but our focus is fairly flat now. Essentially Household Spending is one of the big data sets we have been watching. We saw in july consumers in japan really continuing to cut back their spending so Household Spending down 5 on the year. That was far more than economists had been predicting of 2. 5 . Certainly telling us here that that persistent inflation we have been seeing in japan is really starting to a road purchasing power. There certainly is further headache and conundrum for the boj as it pledges to stick with its easy policy settings and still it seems more sustained signals that growth is really taking hold. That is in play as we get japan coming online, also note japan treasuries coming back online after a holiday in the u. S. On monday. Lets change on because in korea today it really is that focus on ecodata. Those Inflation Numbers out at the top of the last hour stripping forecasts over the cost of off it course of august. That was coming in at 3. 4 and the estimate had been for two point 9 . A big rebound as well from the month prior when it was 2. 3 . The be ok has been discussing this because of course it does present another issue for that centralbank given it has not made any changes january. Essentially they are saying cpi should be around 3 in the fourth quarter, they are seeing it at a similar level with august or higher into september. This is a banks well that has not hiked since january of this year. What is the biggest uncertainty they are saying is International Oil prices so be watching for any more details from the be ok. It does really seem that hawkish tilt could lead to a hike later this year. Lets take a look at what is happening in australia, as we get online today it is that focus on the rba today with its decision. This is going to be governor lows last decision at the helm. No changes expected with the key rate seen being on hold for a Third Straight month but certainly Household Debt is one of the key metrics they are watching their at the central bank. What else we are keeping an eye on is the corporate stories. Of course you mentioned qantas, it is alan joyce departing his role as ceo two months earlier than expected but a lot of pressure on australias flagship courier. That is been a bad pr story adding up. David yes and lets see what the market makes of this, certainly it is the start of mending some of the objects and we are getting the trust of their of consumers. Lets take it back big picture. As bell was just pointing out there is weakness coming through today and it is kind of rare given the last two weeks it has been mostly about gains. Consumer facing names. A lot of the china proxies have done very well. We all are also through the earnings season just about we are have a few holdouts. Just about every single 1, 1300 companies on the asia pacific have not reported earnings. Does it mean, valuations, guidance, what does the market look like . Thats bring in our asia equity portfolio special it who is here with us. Takeaways, what we know now that we didnt a few weeks ago . Ken i think a lot of the expectations were mostly in line. If we look at in china we saw that new economy stocks in particular did better, within the new economy stocks what we saw was consumer names especially the discretionary spend on a year on year basis did improve. In particular what was a bit surprising as well is that within the financial space saw strong gains from brokers as well as insurance related companies. What that meant specifically was more of the savings that has been pinned up has actually gone to some of the more traditional investments through brokers as well as insurance which has really helped some of these companies in particular. Also internet names did really well on a year on year basis so that is expected. Certain areas which did not perform as well as you would expect, material names in particular real estate in china. And also in particular we saw some weakness coming from some of the more industrial related names as well. That has been widely expected. I would say as a whole the first half of the year is widely expected in terms of where things are. David outside of china, any specific segment or sector taiwan and korea come to mind. Ken that was widely expected as well. Taiwan and korea with overall earnings scope for this year compared to a year on year basis. Despite this push around tech and Everything Else the fact is it was very high hurdles for them to still perform very well on a year on year basis. With india we are still expecting to see fairly solid robust earnings coming from india i think right now at least in the First Six Months of the year there has not been a lot of extravagant surprises on the earnings front. Haidi four asean, there has been some bright spots in vietnam has been one you like. Ken ken when we look at vietnai think that is one of the markets we can still call it an untapped market to some extent. The fact is when we look at overall year to date performance the Vietnam Market has performed very well. Particularly from a valuation perspective it is still below its historical averages. When you look at it across a spectrum of Southeast Asian countries the fact is the Vietnam Market is growing quite drastically over the past few years. We are definitely seeing more stocks going through the ipo processes, more investors going to invest in the market. While it still yes we look at overall emergingmarket or asia regional funds are still very under invested in the country being a front market at less than 1 overall holdings. The fact is that with the various fiscal policies as well as very lenient marginal policies we do quite a bit of see see quite a bit of benefits coming through with vietnam. Haidi are we running the risk of throwing out all china opportunities with the bathwater at this point . Ken the fact is we see this as a Good Opportunity for investors when it comes to looking at china. We know for a fact that in the shortterm theyre still going to be some volatility but overall we still expect to see gdp growth to come in roughly about 5 for the year. We expect to see further stimulus to help strengthen the economy and overall when we look at Manufacturing Activities i think that is going to be key. The fact is when we look at overall pmis we see potentially up turn happening but more importantly, we think that ppi has bottomed at the 4 level. With any modest increase in the ppi levels in china we expect to see a pickup in Manufacturing Activities which is going to be a very strong boost for the overall chinese economy during the remainder of this year. David would you touch property . Ken selective. The fact is right now you have to be selective across the spectrum. We are still in a very high Interest Rate environments are regionally across the board you have to be a bit more selective where you want to invest. In particular in places like india. We are seeing more Companies Going through ipo processes in the fact is it is still very much a growing market. India today is what china had with their boom 15 years ago and we do expect there to be some similarities. There are pockets where real estate do still look interesting and worth investing in. David when you say selective is it regionally . Ken yes regionally. Within china you look at not necessarily Property Developers where potentially there still could be down shoot issues but probably management related companies. Those are still companies that are still looking very enticing when you look at the overall return in equity, and the yields these companies provide. Very little pressure on their balance sheets. You have to be more selective grade not necessarily residential. You might want to go through some of the logistics related to property or specifically health care related, there are a lot of those names within the asia space. It so selectively yes on a regional basis but within the Property Side there are still a lot of industries which you can look at. David just to take a big picture again at the notion that the u. S. Economy might have a soft landing, the economy is doing well, is it a hard sell for you to sell asian equities because that group of stocks keeps outperforming and delivering earnings . Ken not necessarily when you look at overall valuation, this year we have a talking about this quite a while. The fact is overall u. S. Stock market valuations are significantly higher than asia. And looking at where we are right now, in the Interest Rate hike cycle and looking at futures and so forth expectations potentially is for the dollar to maybe start to weekend. Especially if Interest Rates start to lower, lets say sometime next year. If that is the case you might see some of the capital flowing out of the u. S. Market and to some of the markets here in asia which are definitely much more interesting evaluation process. David i know you are a markets guy not ecobut it is a good assumption to make that the fed is done it . Ken it is tough to say i do not have a crystal ball. Whether we have one more time in terms of Interest Rate or the hike cycle but i think we are closer to the top than ever before. From that standpoint there are definitely opportunities. Not necessarily for the remainder of this year but closer to 2024 and if we do get that start, lets a weakening of the u. S. Dollar that does potentially bode well for some of the asian markets. Haidi it is always great to chat with you are asian equities portfolio at spring investments. Lets get to bell for some of the movers and very curious to see the investor reaction over the accelerated appointment of a new ceo. For qantas. Annabelle sooner than expected because we knew she was going to take over as ceo in november but just this morning alan joyce has pulled forward his retirement plans or his exit from the australian airline, given just how much public backlash there has been over these bad pr stories. The latest one last week was qantas being accused of selling seeds on canceled flights. It does appear that at least allen joins joyce is bound to that pressure to step away from the role. He will be exiting early handing over the reins to Vanessa Hudson on september 6. That is the state of play, we can see the stock there about 8 higher outpacing the broader asx 200 which is just a little in the red as we get trading underway. Another group of stocks if we change our now that were tracking this morning. Some ones that are being added to the nikkei two to five so it is carried out its semiannual review. These ones here these top three are ones being added so we have the chip equipment maker laser tech and we also have the Ecommerce Firm mccarty here, a furniture retailer. The top two being added to their higher liquidity. Notaro owing sector adjustments, that is what the nikkei local media in japan is reporting. Of those in focus for that reason but i will concerted securities has upgraded its price target for toyota and not raised it to 2007 hundred yen up from 2300 apiece. They are saying that shares are currently trading flat but over the longerterm term they are saying they look attractive. One last talk in tokyo we are watching this mornings softbank because it had the roadshow forearm kicking off. This is the chip designer that is preparing to list later this year. It could be a little dose of reality taking place forearm because they have had to lower the outlook not only in terms of valuation but the amount that could be raised for the company as well. Thats talk a little higher as we get trading underway but broadly so far we are looking fairly flat, Trading Volumes as well sticking in line with their 20 day moving average. Haidi coming up on daybreak will be speaking with Industry Leaders in the climate tech space from this years gas tech conference in singapore. Catch our interview with indonesias upstream oil and gas regulator later this hour. 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. Is it possible to fall in love with your home. Before you even step inside . Discover the Magnolia Home james hardie collection. Available now in siding colors, styles and textures. Curated by joanna gaines. David the clock is ticking for Country Garden to avoid what would be its first default. Now the chinese builder has until wednesday at the latest to make this Interest Payment on the dollar note. Lets bring in our opinion columnist shirley ran. She has written about how the Company Still has some options to get itself out of its debt crisis. What are the options . Shirley i think what Country Garden should do at this point, it is pretty clear that the Chinese Government wants to rescue the real estate market. They have announced nationwide policies to ease down payments and mortgage rates. The benefit for Country Garden is not immediate but what it could do is by itself time and hope for the best. What that means his Country Garden to its advantage has about 10 billion u. S. Dollar bonds outstanding but none of them are due until next year at the earliest. What it should do is keep paying the coupon bonds and hopefully it will not default and chinas fiscal market real recover and gets into better shape. You already see that with onshore yuan bonds. They extended a bond, only 56 of creditors agrees but at least they extended it. So what Country Garden should do is be current on the coupon payments and try to expand the balance balance if possible especially onshore and hope for the best. Haidi annabelle Country Garden often compared to china evergrande. You say they are completely different but what is sort of different Pressure Points here . I think Country Garden there is still some hope left for Country Garden. The two companies have similar asset sizes but Country Gardens liability is only 60 of china evergrandes. For Country Garden the biggest Pressure Point is to deliver unfinished homes those socalled presale homes. Once you take that aside country Country Gardens debt is tiny compared to evergrandes. It has about 10 billion u. S. Dollars of offshore bonds where is Country Garden had 40 billion. I think what Country Garden should do at this point is negotiate with homebuyers and say i already sold you unfinished homes but let me try to put you into another project that has been finished that is in a better part of town. Try to not have so much Construction Cost and i think that is what it could do to make it more efficient. David out of bloomberg opinion, thank you so much. We want to watch the streak given in both equities and that junk bond space here in hong kong. The biggest jump in chinese property shares going back a couple months. Secondbest day on monday and 2023. The open is an hour away there is plenty more ahead, this is bloomberg. Get help reaching your goals with j. P. Morgan wealth plan, a digital money coach in the chase mobile® app. Use it to set and track your goals, big and small. And see how changes you make today. Could help put them within reach. From your first big move to retiring poolside and the other goals along the way. Wealth plan can help get you there. J. P. Morgan wealth management. Haidi a dose of reality as chip designer arm begins its investor roadshow lowering expectations for its valuation and fundraising goals. Lets get more details from our tech reporter. Going into this highly anticipated, some of these valuation estimates were up there. As we come down to earth a bit. Yes evaluations as you can see are coming down from the lofty levels that were touted earlier. One of the things, there was previously a lot of hype around who would participate in the ipo as anchor investors who promised to put down a certain amount of money. While these are expected to include big names like apple, nvidia, intel. The sum is estimated to be around 25 million to 100 million u. S. Dollars each, which is not very big relatively speaking. And also investors are probably reassessing the potential risk including the uncertainty surrounding the China Business and how that will impact Earnings Growth Going Forward. Of course we will have to see how the roadshow actually turns out and what happens next week. David what do we know in terms of the institutional support, who has the company been able to corner as some of the investors here . Right. I dont think we have specifically spoke bit of a cornerstone investors but these big supporters like strategic investors, however you want to call them, there the latest report says this will include Companies Like apple and nvidia, intel, Samsung Electronics and a few more other big names. But well have to see who actually ends up putting down money and exactly how much they are willing to put down which will actually signal how much there is support from these investors who are at the same time big clients to business. There is still a lot of information to come out Going Forward. Haidi our Technology Reporter there with the latest from that arm ipo. Volkswagen says it is focusing on design ahead of its upcoming electric car offering as it works to turn around slide in sales in europe china i should say. This is europes biggest carmaker and it is not unveiling any new models at the munich auto show. The ceo oliver bloom told us what they are hoping to achieve at the event. The auto show in munich, it is a great opportunity for the german Automotive Industry to show the progress in terms of technology. But we have guests, visitors from all over the world and for us a Good Opportunity to share experiences. How we will develop the mobility of the future, in terms of Volkswagen Group we have the opportunity to show the progress in Volkswagen Group. I am charged in charge since one year and last year we presented the progress of our 10 point plan. What priorities we are taking in terms of finance, regions like china and north america, software, technology, all of that and mobility services. And sustainability. So for us, it is a huge opportunity also to show a glimpse of what products our customers can expect in the future. It very promising and i am looking very much forward to it. A year is a long time in the auto industry. A year from now what will you be hoping, where do you expect volkswagen to be speaking at the munich auto show then . We are updating our existing platforms in terms of election mobility. For example the mep and volkswagen called mep plus yesterday, we have shown a glimpse of the iconic gte brand. What customers can expect in the middle of this decade. Next year we will come with a new platform for audi and porsche and in the background we are showing you the audi to six. Driving this car testing this car is so promising and exciting. What we are doing there. And then developing our future unique platform with a lot of stunning projects. I think you can expect a lot from Volkswagen Group in the next years. What is the consumer demanding from you now and how are you meeting that demand . We are in the middle of a transformation and it is about electrification, connectivity, autonomous driving. I think Volkswagen Group is well prepared on the one hand side, we have traditional in terms of driving abilities of our cars. It is a highquality level. And then yesterday we announced we moved Volkswagen Group to a design driven company. We are very strong on design. That will be an important differentiating factor for the future and combining this with new technologies. Develop in our platforms and combining this with partnered solutions in different regions of the world. Being able to offer the ecosystems are customers are expecting a different regions of the world. David the ceo of volkswagen speaking at the munich auto show. A fantastic lineup of conversations we have had their and we have been playing those for you through the course of this morning or at a look at equity markets right now, we are 30 minutes into the cash markets in seoul, sydney and tokyo. Property so far within the property space, since tokyo is leading this gain. The rest of this equity market story is on weaker footing. A lot to get through today, with a position coming up out of australia. A couple earnings to tell you about reported a blowout set of numbers. Lots of stocks to watch, plenty mor the power goes out and we still have wifi to do our homework. And thats a good thing . Great in my book who are you . No power . No problem. Introducing stormready wifi. Now you can stay reliably connected through Power Outages with unlimited cellular data and up to 4 hours of battery backup to keep you online. Only from xfinity. Home of the xfinity 10g network. All of the work that were doing, all over the world, and looks at the most effective ways, to get resources to them, to get services to them. The idea that we have saved five Million Peoples lives, its overwhelming. Its everything. Haidi we do have some breaking data, the japan june berg bank with the final reading for august. We are seeing coming in line with a prior reading 52. 6, comfortably that the level of separating contraction from expansion. The pmi Services Final reading for the month of august as well coming in 54 point three. Unchanged from that prior reading, this as we even see some signs of weakness. Japanese households and recent numbers cutting back on spending in july. We have seen that reflationary effort seeing some effect in japan and that persistent inflation has been slowly uploading purchasing power. With further pressure on the government to ramp more aid. David more pmi too on that note. Perhaps going the opposite way so to start off of hong kong, this is the second month in the row just a caveat that slightly better than estimates 49. 8 but second month in a row that this has held below the 50 handle which i guess theoretically separates optimists and pessimists. The hong kong dollar as you can see is under weaker footing today, it is worth noting they are coming off their worst month for the hong kong dollar since 1985. More pmi numbers coming out vietnam and this one is actually above 50, 50. 5 also coming in better than the previous month. The direction of travel as good as far as these pmis are concerned. Haidi we were just talking about vietnam and the investing opportunities there. Perhaps one of the few untapped markets so far in asia. It is a big ecoday today within the asiapacific more number set to be released later. The big one will be some more Inflation Numbers of the lapines, thailand as well, as well as pmi numbers out of china. Other that continues to paint a picture of steady deterioration for the chinese economy and sentiment. Then of course when it comes to centralbank action, the rba and focus. Governor load to the delivering his final meeting. All but one economist here that we have spoken to expecting it Third Straight meeting where they will hold. The gas tech summit also begins today singapore bringing together top leaders of the energy sector. Lets get over to the event, haslinda is on the ground with our first guest who is from indonesias upstream oil and gas regulator. Haslinda this conference is happening at a time when crude is hovering close to 90 a barrel. Fed tightening, opecplus curbs as well as chinas economic malaise all playing out in terms of those prices. We have insights from sk case advice chairman, joining us here. Good to have you with us. First off, Oil Prices Close to 90 a barrel. Is it heading higher or lower from here . I think it depends on the Global Situation here. So many fairly dynamic situations so i find it very difficult to forecast the oil price. Haslinda what is your sense, where it is where is it headed . We hope that the oil price will still be between the 80 up to 90 because for our country indonesia, because indonesia is importing from other countries, we all suffer here. With the increase in oil price more costs with subsidies to low income communities and things like that. Haslinda we know that indonesia raised oil prices because subsidies tripled, you cannot foot that anymore. Do you see a need for indonesia to raise prices again given where oil prices are right now . I think indonesia is struggling to increase oil production. So many programs, exploration, New Discovery to fulfill our demand. We try to encourage and invite Investor Companies to indonesia to do the exploration. Especially to get the new reserve here. Especially oil to fulfill the demand. Even the gas, i think very good for Energy Conservation because gas plays an Important Role for the future. Even now. Haslinda we know that indonesias lng production missed estimates last year, what is the outlook looking at for 2023 . Yes because several projects here are operating with a delay, obviously because of the covid pandemic here. That suffered for the project and currently we would like a first draft for lng. We are still financing the equipment and preparing for a fitting. Haslinda so when will it start operating and producing and where supply had a . I think after the drill, we have the capability to fulfill the domestic even for the export. And we have a shortfall for several times so we tried to recover for the near future after the sometime this month. Haslinda there is also the adani gas project we know charlotte made an expert exit. Others coming into the fray, can you give us an update on that . Yes after we got the good news, shall as you know around 35 . And energy are newcomers and they are just starting to consolidate and they have an impact. And our new partners. And we are pushing to accelerate the delay of the project because for more than three or four years there was a delay because of the process what shall. Haslinda demand is exceeding supply and we expect consumption to surged by 2050. Given all of these projects will indonesia be able to meet the needs of the people . Yes we expect output impacts 2029. And then we have in populace as well and then around 2027, we also have the ibd project in indonesia. Now that the takeover from chevron, it looks like we will accelerate the program to develop the ibd. Because we have the existing lng facilities so we expect additional production from the ibd will ratify several lng. Haslinda to unlock indonesias lng potential you need foreign investors. Where are you with that . Were you in talks with . We talked with several multinational companies. Haslinda such as . In pakistan chevron, even total energy we invite them. To develop so many potential especially in eastern indonesia. If you compare it to western indonesia, it is less explored. If we would like to find and then idb or Something Like this. We have to intensively explore in eastern indonesia. We just started and theres so much potential there. As to who will extensively explore it in that area. Haslinda thank you so much for your time, there have vice chair of as kk coming to you from at a time when a High Oil Prices are impacting the fight against inflation. David absolutely we just got a reminder of that with korean inflation i suspect youll will be getting a similar reminder it with philippine inflation coming through in an hour. More of that conversation coming up, or more coming out of gas tech 2023. Have a look at some of the other big names we will be speaking with their on the ground. Check that all out on your screens at those times if you are watching out of hong kong and singapore. Or beijing. Speaking of china here and staying on energy, chinas solar manufacturer gcl tech one of the biggest there is an advanced talks with saudi arabia about opening its first overseas factory. That is as the two nations aim to extent energy ties jan oil. The companys joint ceos told me exclusively that operations could start as early as 2025 because of our cost advantage in quality stability i think that in the future of the emerging Technology Manufacturing capacity could continue to increase the market share of glade granular scylla can and this revenue will continue to increase under stable conditions. David before we talk about china which is your main market i want to talk you talk to about what your outlook is for similar products this year . I am very optimistic because as of august of this year the entire pv markets manufacturing capacity and its utilization rate are quite high. From an optimistic perspective this years capacity will reach 450 gigawatts. Even a pessimistic estimate might reach 380 megawatts. David can i ask you about competition in china which is your main market. Do you think there are too Many Companies . I think at this point because last year and the year before our pv companies yield was quite high and the return on investment may have also been very enviable among all manufacturing industries. It is not surprising that capital including investors, in the process of switching to diversification will undoubtably choose or hope to choose to enter the industry. It is great enough in the profitability is high enough. So this is not a surprising choice. But i think looking forward in the next two to three years with the intensification of competition, the advantage of larger scales, and a differentiation regarding talent reserves, technical reserves and r d reserves, the concentration of companies in the photovoltaic industry may begin to converge in the future and the number will go down. David the vast majority of your revenues in sales is china, that is your main market. Does china remain your future purely or are you looking outside china to expand in terms of commercial and revenues . From the current point of view we have gone pretty far in the middle east. Including me and our cto, we have made several visits to saudi arabia and qatar. Laces we want to speed up implementation. The good news is that saudi arabia has mature industrial and you factoring infrastructure and experience. And it can provide us with enough photovoltaic output including electricity reserves, i think this is a good alternative. David speaking of the middle east which you mentioned, a few months ago when we spoke to you you mentioned that you are considering putting up your first plant outside of china. Can i ask if you have made any decision on that plant and if so what is the target capacity and also what would be the target start date of any sort of operations there . We have a team of about a dozen people and are communicating with saudi arabia and the royal commission. We have submitted our Site Selection enter usability study report. In the meantime our Company Registration is also underway. But its progress is much slower than that in asia. Compared to china and hong kong. We very much hope that we can get the land and start some preparations at the end of the year which is the winter of saudi arabia. Because the summer is to hot in saudi arabia. The temperature can reach over 60 degrees celsius during the day and that would be too hot for construction. So we wanted to avoid the summer process and start the project as quickly as possible. David that was the joint ceo of gcl. Plenty more ahead, we will get you an update on markets next. This is bloomberg. Rates, exemption certificates or filing returns. AvalarAhhh Ahhh Ahhh ahhh 76 of 23andme Health Customers surveyed reported taking healthier actions. Ahhh because they know health isnt just a future state. Health happens now. Start your dnapowered Health Journey today with personalized insights from 23andme. Haidi annabelle this is daybreak asia and with a check on markets today that prevailing thing we are watching and markets today is that peak rates narrative. That is being tested this morning by key inflation data for instance in korea we saw Consumer Prices ticking up to 3. 4 on the year. That was a rebound from 2. 3 in the month prior. A much faster pace of gains that have been expected by economists of the be ok has not raised rates since january but has maintained a hawkish tilt and the question is whether that translates into a hike later this year. Probably quite dependent on what happens with the fed but certainly the bank of korea is watching this closely in their saying that International Oil prices that is what is posing the biggest uncertainty. It is not just that commodity price lets change on because were watching soft commodities and just a couple lines dropping in the last 10 to 15 minutes with indonesia because we do understand that indonesia could import 250,000 tons of rice from cambodia. That is coming from an official statement from the president. Indonesia, we have seen a rice inflation they getting 13. 7 percent in the latest reading and that was the most we have 2012. So something that is really putting a risk, the overall slowing trend in orange and Consumer Prices, coming on the back of headline inflation in indonesia. That did accelerate for the worst time in seven months in the latest reading. That is really testing the broader emerging markets narrative generally because we did see cities inflation and the price index, you can see at the end rising for the First Time Since february. So certainly a lot of focus this week on upcoming Inflation Numbers from thailand. The philippines, taiwan. They are all due this week. It south korea this morning. Perhaps a leading indicator of more price pressures only once again. David correct. And about 40 minutes as you mentioned the philippines is due out next. Annabelle in sydney for us. It lets pivot to geopolitics and india. Also leaders of the worlds Major Economies are gathered there later this week for the g20 summit. It is a chance for the Modi Government to showcase its push to become a key player in the Global Economy and geopolitics. And reporting out of mumbai. India, home to a now at record at 1. 4 billion people. More than half under the age of 30. Perhaps that also includes the largest number of jobless youth anywhere in the world. The Fastest Growing at economy in the world, india has the third highest number of billionaires. But on per capita income it ranks at the bottom. The widening gap between the richest 10 in the bottom 50 makes india one of the most unequal countries in the world. Democratic English Speaking india at with an army of Software Engineers has sought to become a major economy since its economic liberalization in the 90s. But authoritarian china has made a bolder moves to become five times bigger. So why might this be indias moment . One big reason, it is not china. Policymaking from beijing nowadays remains hard to predict. Western countries are wary of chinas growing economic and technological clout. International companies are seeking supply chain diversification. China plus one. To speed that along indias government is spending record amounts on infrastructure and offering production incentives to key industries. Other reforms range from a unified National Sales tax to a world leading Digital Payment system. Polish investors and stock market highs have furnished the story in the year if its g20 presidency. And the foreign minister modi hopes it will set the stage for his reelection next year. It will also test whether most indians are buying the india shining story or not. It haidi more ahead, this is bloomberg. You know you are retired right . Am i . Ya the queen sleep number c2 smart bed is now only 999. Plus free Home Delivery when you add a base shop now only at sleep number. Wouldnt qualify for an erc tax refund. You should get a Second Opinion from Innovation Refunds at no upfront cost. Sometimes you need a Second Opinion. All these walls gotta go ah ah ah id love a Second Opinion. Take the first step to see if your Small Business qualifies. David one stock we will be watching when markets open up his trip. Com. They reported just a massive heat in earnings, lets bring in angela are Bloomberg Intelligence Senior Research analyst with us right now. The b. I. Survey showing Chinese People are starting to travel domestically not so much internationally. A good set of numbers. Dont seem to jive. Lets put those things together. Angela the domestic has been very strong in china because of pent up demand but if you look into the number obviously it has been gaining market share. I guess it is coming from two reasons one is that the company is gaining scale because it is expanding into china and the other is because the company has much better terms for travelers. If you see the company has been spending a lot of resources on penetrating into lower tier cities and also people became more tech savvy during the pandemic. They had to order food online so before in small cities people might be going to local travel agencies to book flights or something but now they might be doing it more online. That is basically where they have been getting market share and the other is if you compare those terms when you book hotels or accommodations, their terms are better in terms of cancellations. In this sense i think the company has been getting much more market share to the upside. Haidi i suppose the question is how long does the reopening pentup demand situation last for . Angela i think in china it has been the same may be for other events as well. You see so many weddings in china too because people all have to do something after three years of lockdown. And also that is the reason why people are traveling more so we are seeing in the pentup demand, it is not sustainable and might be peaking in october. The good thing is we have some more upside coming. Say in terms of malaysia travel we are seeing concerts and live events going on. Young people like to travel to other cities to watch their Favorite Singer and Business Travel has been pretty mixed so far. Really because the economy has been weak. At we see usually takes around six months to plan some kind of conferences but think about studies like if they study planning in earlier this year were going to see much more events coming in the second half. Haidi still more to come in the pipeline, are Senior Intelligence researcher take a broader look at markets trading and australian focus on rba decision day. We are expecting a third consecutive meeting of a holds. It is governor at lowes last decision as well. That is one to note, we are also watching korean markets closely with inflation in south korea outstripping forecasts in august on the back of those Higher Energy costs. That is likely to be a real theme Going Forward as we have some other inflation readings and putting from the philippines later. As it asia are markets coverage consist continues, this is bloomberg. Its possible. With james hardie™. If sports fans built a streaming service. Cant believe the football season is over. Yeah. But with my stuff, we can rewatch all the games weve recorded. The minnesota comeback jjs finale. Butt punt oh, is that what the my stuff feature was invented for . Saving buttrelated content . Cause i thought it was for keeping your favorite tv shows and movies all in one place. Im sorry, mr. Sanchez. Live tv and sports. And more but mostly sports. Thats fubo i dont want you to move. Im gonna miss you so much. You realize well have internet waiting for us at the new place, right . Oh, we know. 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