>>." the cash trade is just under an hour away. sticking with the message. powell uses jackson hole to say the fed could begin tapering this year but is not in a hurry to hike rates. either wreaks havoc. louisiana faces blackouts amid the most powerful winds to hit

the state. knocking out over 95% of oil output in the gulf. opposition leader olaf scholz cements his position as front-runner in germany. we are just under an hour away from the start of cash equity trading in europe. another record overall first read on dovish comments from jay powell. his carefully constructed speech in wyoming at jackson hole trying to de-link the start of tapering which may happen this year from the start of the rate hike cycle. the european stoxx 50 futures again at -- a gain of 0.1%. futures are flat in germany our focus remains on -- futures gaining 0.1%. let's look at what is happening

past the european open and toward the u.s.. s&p futures gaining marginally. nasdaq futures also positive, very modestly indeed. small caps really rallying. gains of more than 1%. trade around the small caps momentum on the back of those comments from jay powell. let's switch over to have a look at the gmm. the commodities space is also gaining. the focus remains not just on commentary from the fed, but the events that are unfolding on the u.s. coastline, particularly louisiana. we just mentioned the headline. 5% of oil capacity taken out as a result of these very strong winds. 150 miles or there about. that is something to bear in mind. in asia just holding the gains. a bit of turndown into negative

territory. the csi 300 down. more commentary over the weekend from regulators, additional sectors warning when it comes to the economy. the flipside, the pboc, the central bank, and china adding additional 30 for the fourth day in a row -- additional liquidity for the fourth day in a row. the commodities space broadly positive. let's break out the story around jerome powell on the back of what happened friday, saying the fed could begin tapering later this year. he is in no rush to hike rates. jackson hole giving markets another lift. >> the criteria we put in the statement about what it could take for us to begin tapering, i think we are pretty much there.

>> we have a fair amount of energy and momentum. i think we can do our tapering faster. >> let's phase out purchases and give ourselves some breathing room in 2022. >> let's start the process. get that over with. >> it may give us more flexibility down the road on our decisions. >> the timing and pace of the reduction in asset purchases will not carry a direct signal regarding interest-rate signals, for which we have implemented a more stringent test. >> fixed income stress. are you and the team at saxo feeling more confident about the trajectory of tapering at rate hikes in the u.s.? >> maybe more confident about the tapering trajectory, but not interest rate hike.

last week we learned three important things. the federal reserve is going to begin tapering. the decision on which month or when the pencil the labor market. we remain quite concerned about inflation. there's a lot of focus on nonfarm payrolls. if that exceeds expectations, we can expect powell to announce tapering as soon as september. taking place in october. if the job numbers missed estimates, -- miss estimates, that can be delayed. >> 150,000 is the forecast after more than 900,000 for the month of july.

what kind of number above 150,000 would you need to see for that announcement and the implementation in october? >> we would need that number to be very close to what we have seen the past couple months around 900,000. it is important when tapering begins, what is going to be the pace of tapering? we have many who see tapering concluding the first half of 2022. this means the federal reserve should be tapering between 15 to $20 billion per month, which is pulling a lot of money away from the bond market. when we are looking for example

at u.s. treasury yields, tapering is going to be more aggressive than what the market believes. we expect if we have a tapering announcement as soon as september, 10 year yields will rise to 1.5%, and tapering looks to be more aggressive than expected. we can see those 10 year yields breaking about 1.75 before the year ends and could rise as much as 2%. in the short term, if we have a nonfarm payroll that meets, that could potentially drop again and the 10 year -- before tapering begins.

>> at the front end of the curve, do you expect the fed to keep rates relatively well paced? >> we are less confident about that. the point about powell's speech last week is that inflation is more of a concern. if that is the case, the tapering is not going to have an effect because the federal reserve will continue and we will continue to stimulate inflation. with inflation keeping very high , at that point, the federal reserve has to push forward interest rate hikes. from now up to three years, the market is priced for only three interest rate hikes. that is way too optimistic. they need that to increase.

>> that brings us to the question of whether the fed is behind the curve. althea stays with us, fixed income strategist at saxo bank. coming up, the u.s. blows of a vehicle -- the latest on evacuation efforts, plus china's biggest debt manager finally releases its 2020 results. next, hurricane ida sweeping across the u.s. gold coast on the 16th anniversary of hurricane katrina.

>> as soon as the storm passes, we are going to put the country's full might behind rescue and recovery. we are here to help the gulf region get back on its feet as quickly as possible as long as it takes. >> hurricane ida intensified and has hit louisiana. hurricane ida could cause more than $40 billion in damages, putting it amongst the top 10 costliest u.s. storms. u.s. operators in the gulf have been forced to shut off 95% of oil output. joining us from singapore's bloomberg's energy reporter. what is the market watching?

>> everyone is looking at gasoline. there has been a large amount of crude output dropped from the u.s. gulf, but at the same time, in louisiana there are a lot of refineries. they helped fuel the u.s., helped fuel travel within the u.s.. we saw today the price of gas in the united states spiked as much as over 4%. it has now come back a little bit. you look at the price of crude oil in the united states, wti, it is very little changed. folks are very worried about that output. there does not seem to be a lot of damage to that 1.7 million barrels a day. there is expectation that will come back. what the market is watching is, what about refineries? will that refining capacity come back quickly?

will that be able to feed the united states when it needs gasoline when folks are traveling? that is going to be the big question the next 24 hours. >> what does it mean for the natural gas production in that region and across the board as well? >> natural gas output has also dropped in the gulf. the gulf just makes up 3% of total natural gas production. having the 3% drop, already a pretty tight natural gas market. you see prices have risen. u.s. natural gas prices are around the highest level in 32 months. one silver lining is that it seems to have missed all the major u.s. lng infrastructure at the border of texas and louisiana.

the closest plane to the storm is seeing minimal disruptions to delivery. u.s. lng deliveries most likely on schedule, just slightly delayed to customers in europe, customers in asia. the impact on the global lng market at this point seems to be minimal. >> less impact on the lng space then some expected. let's get the the first word news now. >> anthony fauci says the door is open to administering booster shots in the united states. a possibility president biden

had raised. the nation's top infectious disease expert says he's open to a variation on the timeline based on data. efficacy is shown to weaken over time. 80% of singapore's population is fully vaccinated against covid. senior officials have -- the milestone. the nation currently has stricter social distancing measures than many global financial capitals. shortly after u.s. national security advisor jake sullivan said there is still serious danger in kabul, where a suicide bomber last week killed at least

180 people including 13 u.s. service members. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> coming up, the candidates are vying to take over for angela merkel's face-off. the policy issues, and who voters think won. ♪

wicks angela merkel appeared on germany's political scene after the fall of the berlin wall. it is with the chancellor was looking at -- looking for to

balance out the cdu, young, ambitious woman from the east. merkel's journey to germany's has not been easy. she has been tested by the global financial crises and negotiating a stimulus package to counter the great recession. her mantra is if the euro fails, europe fails. in may 2011, she lauded the end of nuclear power in germany in the waco fukushima. -- the wake of fukushima. the debt crisis rules on and merkel comes under fire over europe's refugee crisis. if that is not enough, vladimir putin invades crimea. the u.k. votes to leave the eu. and then there is donald trump.

if postelection talks dragged into december, merkel will become germany's longest-serving leader. battling covid a very well be her toughest hand yet and it is far from over. how will germany's next chancellor play the cards dealt by angela merkel? >> angela merkel's consequential legacy mapped out as german chancellor. as we count down to the elections taking place at the end of september, the three front runners vying to take over have faced off in the first televised election debate. the contender from angela merkel's conservative bloc was seen as the biggest loser. althea is still with us. how are you assessing the implications of the political changes in germany?

the different coalitions. and what it means for the german fixed income complex. >> we believe bund yields will rise and turn into positive territory by the end of the year. the german election can be the biggest catalyst that is going to be the biggest driver for higher yields. it looks very likely it is going to be a three party coalition where the fpd and the green party are going to be involved. they advocate for a much higher spending which will translate in a higher issuance of bunds that will drive yields higher. i want to highlight the fact that bunds at the moment

are correlated -- we have seen 10 year bund yields dropping by 25 basis points. around 20 basis points can be attributed to plunging yields in the u.s.. only five can be attributed to the fact that we see a slowdown of the economy and the recovery in europe. as we said earlier, if you see yields rising in the u.s., as anonymous specially as the reflation trade begins again and we have tapering, that would inevitably drive bund yields higher. and we'll have a lot of consequences for the growth of

the european sovereign base. >> indeed, so the importance of that correlation between bunds and u.s. treasuries, you touched on italy and spain. in terms of the spread between the german bunds and the italian and spanish debt, do you expect that to narrow as bund yields creep up? or do other fundamental factors at play lead to a blowout of spreads? >> in terms of btp and boned price -- bund prices, we see the spread falling to 75 basis points by year-end. the reason is there has been an improvement in terms of the bond market that italy recently canceled the bond yield because they are cash-rich.

also italy is receiving -- that is definitely constructive for italian btp's. when we look at the french or spanish bonds, the story is completely different. we believe as bund yields rise, spreads need to adjust. the biggest losers are going to be french. >> interesting insight across the so there -- the sovereign debt space. your inflation expectations, you spoke previously about your

views on longer-term inflation being sustained. is there anything that changes that view? >> we think inflation is going to be more permanent than central banks think. we see that because house prices are high, wages are increasing. but the point i want to make about inflation is that right now we have a lot of investors looking for inflation protection. and the story is that inflation links to bonds are extensive. you have negative yields and in a worst-case scenario, unless you hold that bond until maturity, -- >> we have to let you go, running short of time.

thank you for your insight this morning from saxo bank. plenty more ahead, including the latest on the situation out of kabul, afghanistan as we approach the august 31 deadline. stay with us. this is bloomberg. ♪

>> welcome back to the open. we are 30 minutes from the cash equities open. the cac is flat and dax futures are just modestly in the green. joe biden been briefed on a rocket attack at an airport a day after a u.s. drone blew up a vehicle heading toward kabul airport that was carrying

several suicide bombers to u.s. central command. it comes ahead of the u.s. withdrawal on tuesday. joining me now is bloomberg's south asia reporter. in terms of the rocket attacks we have seen aimed at that airport and presumably u.s. forces, what are the details and were they able to prevent those rockets causing significant damage? >> the rockets were fired from a vehicle outside the kabul airport. we have reports saying five rockets were fired toward kabul airport. the u.s. intercepted those rocket attacks.

rockets were also fired across parts of kabul. this has not caused any casualties of people in kabul. >> it underscores the precariousness of the situation as they run down the clock to this deadline. what is the situation in terms of manpower on the ground and how far they have left to go in terms of getting these evacuations done before the deadline? >> the evacuation is in the final stages. u.s. forces are leaving afghanistan by tomorrow.

everyone is expecting the u.s. to leave afghanistan by tomorrow. the taliban are going to be awaiting the withdrawal. this is a victory for the taliban. they are expected to leave afghanistan tomorrow after 20 years of war. >> thank you for that update.

let's get the bloomberg business flash. >> fortescue metals net income has doubled. record shipments, revenue, earnings, and cash flow over the financial year are a reflection of strong customer demand. fortescue joins rio tinto in reporting strong results on the back of surging demand for chinese steelmakers. huarong reported a record loss of almost $16 billion after revealing results for 2020 five monthly. it returned to profit in the first half of 2021. the debt manager plans to shed all its subsidiaries and says that should ensure operations for the next 12 months.

an mgm horror film reach the top of the box office knocking free guy into second place after its top ticket sales for two straight weeks. it made 24.2 billion dollars after being repeatedly delayed because of the pandemic. >> let's focus on china. the long 2020 results of debt manager huarong have shown a record eye watering loss. leverage hit 1333 times and capital buffers were far short of the regulatory minimum. but the country did return to a small profit in the first half of this year. rebecca, you have been following this story from the start. what is spooking investors? >> it has been five long months waiting for these results. that slight turn to profit has

helped lift longer dated bonds a little bit today in trading. the capital adequacy ratio leverage is still under what it needs to be. that is something which potentially could impact the credit rating. i still need more detail and clarity over precisely what this will actually be and how quickly water on can deliver that. >> our focus which is to ever grant -- evergrande and mates around the poker table who back investments. what is happening with evergrande? >> for many years now the story has been getting to the brink of

liquidity crisis but always relying on this network of friends. we are seeing that pain showing through. the value has dropped by 70% so far this year. we see a massive $1 billion holding in offshore bonds by another tycoon. the question is really whether or not huarong -- where the urn of the company is going to deliver some solution. >> we talked about huarong and the bailout, how that impacts the prospects for evergrande. >> the fundamental question with huarong is whether it changes

the likelihood of a bailout for any other chinese firms. the consensus really is that huarong is a very idiosyncratic and unique case. a lot of secondary risk, the new phrase appearing among policymakers. when it comes to these private firms that have expanded massively, the focus will still be on working out just how they can sort out these debts themselves. who are wrong -- huarong has taken a market oriented approach and they are still trying to work out the best way to help evergrande. more blog -- more broadly for global investors, the solution, even though they had a bailout, a lot of people lost a lot of money. >> anything from the bank

earnings that jump out to you? >> the question is how exposed banks are to property firms. these funds have quite a lot of exposure to property firms. as we see tightening and we see these smaller developments, it will be interesting to watch which banks, citywide or regional, are going to have to rebalance their exposure. >> coming up, the candidates vying to take over from angela merkel face-off in the first televised german election debate. the breakdown of policy issues and who the voters think won that debate. ♪

>> i would say that cryptocurrencies are a bubble. i would describe cryptocurrencies as a limited supply of nothing. to the extent there is more demand than the limited supply, the price would go up. to the extent demand falls, price would go down. there is no intrinsic value to any of the cryptocurrencies, except that there is a limited amount. >> why would you not put some short on cryptocurrencies? do you think that is a good short? >> when we look at the subprime, the reason we shorted subprime is because it was asymmetrical. shorting limited duration that trades at a 1% spread, you can't lose more than the spread of the duration. if it defaults, you can make the

higher amount. in crypto there is unlimited downside. even though i could be right over the long-term, in the short term, as in the case of bitcoin, and went from $5,000 to $45,000. you would be wiped out on the short side. it is too volatile. >> john paulson speaking to david rubenstein on bloomberg. catch the full episode tuesday in new york or wednesday in london. let's check on those crypto prices. bitcoin up your today, 55%. bitcoin currently trading 47,900, just over 5040 -- similar territory in the losses we are seeing in today's session, currently priced at 3165. that is your crypto index. let's take a look at what we are going to be watching for this week.

the u.s. open tennis tournament starts today. we are going to get euro area consumer confidence. almost all american troops have been pulled out of the country after two decades. wednesday we are going to be monitoring the opec-plus meeting. will they stick to their commitments? friday, we are going to have the august u.s. jobs report. let's get the bloomberg first word news with simone foxman in doha. >> hurricane ida slammed into louisiana packing winds of 150 miles per hour and threatening mass flooding. more than 700 50,000 homes and businesses are without power. blackouts could last weeks. anthony found she says the door is open to administering booster

shots in the united states sooner than eight months after receiving a covid-19 vaccination. the nation's top infectious disease expert says he is open to a variation on the timeline based on the data. the united states has outlined a plan to start administering booster shots on september 20. vaccine efficacy has shown to weaken over time. 80 percent of singapore's population is now fully vaccinated against covid, outpacing advanced economies. the nation currently has stricter social distancing measures than many global financial capitals outside asia. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. back to you. >> the three front runners vying

to take over from angela merkel have faced off in the first televised election debate of the german election. maria tadeo is on the ground for us. you are saying it is more nuanced than saying olaf scholz won. >> it is, because if you look at the debate yesterday, the first of three debates we are expecting before election day, olaf scholz won that debate. you look at the polls, cementing the lead, but when you look at a bigger picture, there are a number things -- a number of things i would point out. armin laschet was on the attack and he was much more energetic than we expected.

baerbock had a platform. she said when you look at the issues, coronavirus or the crisis in afghanistan, it is the cdu and the spd that are currently in government and have not managed to deal with this effectively. olaf scholz did what was expected, but there was no star power feeding into that debate. for both laschet and baerbock, they did not win if you look at the polls, but it was an opportunity -- it was a platform. >> did we get anything from the debate they can hang their hats on? >> when you look at anyone in markets and you ask, what is it you care about in the german election? they tell you it is about fiscal policy, what this could mean for the european monetary union and the currency perhaps deepening that union when it comes to the single currency.

if you were expecting to get clarity on that, there was very little yesterday and that is what struck me. this is still very much a debate on the national issues. it was still very much seen from a domestic prism. we did not get an indication of big changes on that front. perhaps if you were hoping or you had big expectations that this could be a breakthrough when it comes to the green, the fiscal, in europe perhaps you are disappointed. >> this increasingly interesting run-up to the election. coming up, we are going to be speaking to special guests about the german elections in a half-hour special. we are going to discuss the polls, germany's role in the eu and the world, challenges when dealing with the u.s., russia, and china. don't miss our germany decides special right here on bloomberg tv from 9:30 a.m. u.k. time. one industry that will be

central to the german election and the country's economy, of course, the auto sector. matt miller spoke with the ceo of audi. he was bullish on the outlook for edie's. -- ev's. >> we have a better chance than any company to offer high quality and good price product together with a good margin that we can achieve because of the very strong brands to sell the cars that are highly differentiated, even using the same platform on the hardware side and the software side. >> the ev transmission -- transition for the u.s. economy as well. >> discussions on production in the u.s. are ongoing.

we do not know what the result will be. we have factories where we produce. it is an important point. the likelihood of producing in the u.s. is there, yes. >> the audi ceo speaking to bloomberg's matt miller. coming up, we are going to look at your stocks to watch as consumers continue to venture outside. can delivery services maintain their profits? this is bloomberg. ♪ ♪

>> welcome back to the open, seven minutes away from the cash equities open. let's get your stocks to watch. what are you looking at? >> the first one i'm looking at, upgraded again. raising the price target of 670 krona. that is a 14% premium to the last closing prices after they had good earnings out last week. analysts are upgrading their price targets, pointing to strong growth trends and of course that scrapped simon -- salmon offer. >> to food delivery, what is happening? >> you want to watch shares, it is good news if you order a lot

of takeaway. lawmakers are going to be making permanente cap on delivery fees. they will not be able to charge more than 15% per delivery order and more than 5% for marketing and other fees. the company is exposed to that through grubhub. >> a miss in terms of earnings? >> a big miss. a norwegian online marketplace company. analysts were expecting profit and instead they got hit with a 43 million euro loss. they were expecting a profit of 70 million. the company does remain upbeat. they saw further recovery across the board for the second quarter, expecting positive momentum through the rest of 2021. low volumes and uncertainty in the short-term. >> thank you very much indeed. coming up it is of course the

market open. we are a little under -- a little over five minutes away. futures pointing to the positive . dovish commentary from jay powell at jackson hole. the stoxx 50 futures up 0.2%. the cac just holding onto gains. dax futures up 0.1%. worth watching travel shares. it might be the eu reintroduces curbs on u.s. travel. it has been important for the tourism trade in europe over the summer months. we are watching out for that. the s&p futures, just broadly modest. the nasdaq as well, dow jones. another record on friday. still in the green with u.s. futures. the commodity space, looking for something to flag. we have that hurricane lashing the coast of the united states, hurricane ida.

copper is higher today. the focus remains on the economic recovery in china. the open is next, counting down to that. this is bloomberg. ♪

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tom: welcome back to the european market open. a minute to go until the start of cash equity trading. sticking to the script. jerome powell uses jackson hole to say the fed could begin

tapering this year is not in a hurry to hike rates. louisiana faces blackouts amid some of the most powerful winds to hit the state. the hurricane knocks out over 95% of all oil output from the gulf. and armin laschet fails to lift his campaign. let's take a look at the futures coming in. at the end of the break, they were pointing up. they are still clinging onto positive gains. the cac 40 also in the green as is the dax. it is a bank holiday in u.k. so the ftse is closed. here is how things are opening in the first few seconds. had a record close on wall street on the back of those dovish comments from jay powell separating the timeframe of

tapering with rate hikes trying to give us clarity about the sequencing even if we don't yet know exactly when tapering will take place. he said it is likely that this year is when tapering will start. bloomberg intelligence says the start could be and december. the cac 40 up 0.1%. france and spain are also flat as a pancake. but in context, another record high on wall street. asia holding steady. a handover from europe. it is the next catalyst? we are --what is the next catalyst? we are looking towards friday for the nonfarm payroll numbers. there is a debate as to whether or not we will beat the forecast. jay powell also warned about delta and the covid variant. and some data from the weekend.

the u.s. adjusting that the global momentum is starting to ebb. italy is also just opening. let's switch focus to what year jerome powell had to say and the implications not just for equities but for fixed income as well. jackson hole is giving markets another left. we look at the timeline for tapering. >> the criteria that we put into this statement about what it would take for us to begin tapering, i think we are pretty much there. >> we still have a fair amount of energy and momentum. i think we can do our tapering faster. >> let's give ourselves some breathing room in 2022. >> let's start the process. >> it may actually give us more flexibility down the road.

>> the timing and pace of the coming reduction in asset purchases will not be intended to carry a direct signal. for which we have articulated a different and more stringent test. tom: pleased to say that we are joined by the senior macro strategist at nordea. what is your view of the implications to dealing with the start of tapering from the right hike cycle? >> what they have done is affected the economy in multiple ways. some of which are well-known. some of which are less known. all of these will begin to reverse a little bit which is what the fed wants. but the impact on equity is not

moving from the quantitative easing side. what indices will go up. we have built a system on high levels of debt. once industries start to go much higher, people become more uncertain regarding the future because the risk reward has changed for one and number two, it does achieve a degree of stability. we have pushed all of that liquidity concentrated in a few places such as real estate, credit, and conversely the depressed outlook in fixed outcome and high yield. tom: do investors exposed to those areas need to start

repositioning? or was the dovish tone from jay powell where he really emphasized he was not in a rush particularly given his concerns about the delta variant, to go down that route of rate hikes? the focus is on tapering. >> in a sense, we are in a world of slight insanity. the narrative in which we live in is one that can be sustained for many months. this is the one you want to start preparing for. that means diversification, prudence particularly on the high yield but the essence -- a

very sustainable carry trade which has been correlated for reality. tom: we are approaching the moment where reality is what we see. in terms of yield, the spread, you are looking at about 111 points. >> that is the reason you know the world is in an unstable you will librium. once you are stuck in a place you tend to stay there for a significant amount of time. it is rational for the treasury yield to be so low. the fed eventually will hike inflation. and we are in a good process to transfer information.

[indiscernible] it is a great story. we know the yields are not sustainable in the long run. but in a few months, even if we taper, we can probably stay there for a significant amount of time. tom: 150, 160 on the 10 year. sebastien stays with us. hurricane ida swept across the u.s. gulf coast on the 16th anniversary of hurricane katrina. what timing. shattered refineries along the coast causing rising prices. this is bloomberg. ♪

tom: welcome back to the open. 10 minutes into the european trading day. futures pointing to the game. markets are holding onto gains across the region. in terms of the dax, a flat. investors are looking for catalysts after the dovish comments from the fed. global investors as well because that could change the trajectory and the timing for tapering.

the ftse 100 is closed. there seems to be a lack of conviction in the markets. in terms of sequencing. politics remain in focus in germany. hurricane ida intensified over the weekend. more than 150,000 homes have lost power in louisiana. hurricane ida could cost more than $40 billion in damages putting it among the top 10 u.s. storms. u.s. operators in the gulf have been forced to shut where the 95% of oil output. president biden spoke about the situation. >> as soon as the storm passes, we will put the country's full might behind the rescue and recovery of the gulf region. we will get back on the streets as quickly as possible. as long as it takes. tom: joining us from singapore

is bloomberg's energy reporter, steven. you spoke to us in previous hours about the relative resiliency of the oil space in that part of the u.s. >> right now, the oil market -- they are watching the gulf of mexico production and right now, there is 1.7 million barrels a day of oil that has been off-line because of this, because of the hurricane. and that is 95% of total output from the gulf. there are no reports of any large damage. the market is expecting that to come back relatively quickly which could explain why oil is not trading up much higher. gasoline in the u.s. jumped as much as 4% earlier today because of fears that a lot of refineries in louisiana are off-line and might be damaged. and they might not come online

quickly. there is widespread blackouts across the region that could lead to a difficulty of bringing them back online whereas the offshore platforms are easier to bring back line -- to bring back online. tom: watching to see how quickly they can bring the refineries back online. what about natural gas and exports? >> u.s. output from the gulf is -- has also been put off-line. offshore natural gas output in the u.s. is not very big, only 3% of total u.s. natural gas output but because the u.s. is facing a natural gas supply crunch, the 3% off-line has led to higher natural gas domestic crisis. it looks like the storm has not had a direct impact on any of the lng export facilities.

european natural gas prices just shot up to a record high which indicates there is still fear in the market by the u.s. might have to come back or delay some delivery. and europe is also facing a supply crunch. any delays or lost cargo could have a relatively large impact. tom: our energy reporter with the latest on the impacts of hurricane ida on the energy region in and around louisiana. you can track the hurricane on your bloomberg terminal. sebastien galy is still with us. i want to look at the equity space. you prefer north american equities. what are the rationale behind that? sebastien: the growth is slowing down in the u.s. for these next months. we saw inflation expectations a

little higher but that is transitory for the month of june. the on that, you still have an economy knowing at a decent momentum with earnings at a decent pace. and optimism, some irrational and some rational, is still in the markets. but it is a broader story than north america. developed market equities should do well. tom: i look at europe and i look at a few catalysts. ecb. german elections. and you have a vaccine rate that is much better in europe then it is in the united states. but still you prefer north america over europe. why is that? and why are you not seeing

optimism around european equities? sebastien: your average european investor is more rational. and slightly bearish. slightly pessimistic looking at europe. they are not very excited about a bunch of companies that is very cyclical. europe is also proliferating in terms of new technologies and companies. it is also transforming itself in a fundamental fashion. it is a good european story but not an exciting one because the investor base is different from the u.s. investor base. average american investors are viewed similarly to the chinese. tom: i love that breakdown of

the behavioral traits of different investors in the u.s., europe, and china. in terms of where things stand when it comes to certain themes, the resilience has surprised some. is it time to challenge the growth theme? sebastien: no. because it is a function of low indices and indications of growth over the long-term. the growth expectation over the long-term [indiscernible] they are trying to do this again in insurance and probably failing again but the process is a powerful one and as long as interest rates remain low and as long as investors are not perturbed by the specter of

recession, the growth story is well supported. growth is going in the right direction. there is a competition between something that is deeply exciting with our attention versus something that is less exciting but it is appealing over the long-term. tom: you can find excitement in the chinese market. you want exposure in the chinese equities? sebastien: what we have seen is that there is a structural shift in policy in china, not a tactical one. that means they go from sector to sector to change the behavior of each sector and to spread what is earned by equityholders and what is earned by your average household. they are trying to copycat what the u.s. government is trying to

do to tencent in the united states. they are doing the -- they are doing it because there is a fundamental fear in china. because it is going from sector to sector come once a sector has been hit, it is unlikely it will be had taken which exposes value for example in the tech sector. so china should be treated with a certain degree of prudence. tom: prudence around china. some opportunity and value in the tech sector. great insights. sebastien galy, senior macro strategist from nordea. coming up, the candidates vying to take over from angela merkel face off and they break down the policy issues. this is bloomberg. ♪

tom: welcome back to the open. 22 minutes into the european trading day. up 0.1%. more positive in germany. we had the election debate last night and olaf scholz was deemed

to have won that. the cac 40 is also gaining about 10 points. the ftse 100 is closed. and in italy, gains of just over 0.2%. let's take a look at what is on the move in terms of individual stocks we are focused on. stamen gaining 1.5%. the price target implies 14% increase from the closing price. friday earnings topping estimates for that stock. we can move on and take a look at atlantic sapphire which has managed to source some liquid oxygen. gaining 0.2%. that is atlantic sapphire getting a hold of some liquid

oxygen that could help the business longer-term. and down by 0.5% is adevinta. this is on the back of a second-quarter loss which missed estimates. estimates were a 17 million euro profit. down 0.5%. let's switch focus. the three candidates looking to take over from angela merkel faced off. let's get more from bloomberg's maria tadeo following the twists and turns out of berlin. who won the debate? maria: if you look at the poll that was done after the debate, it was olaf scholz cementing this momentum for the spd. a new poll will come out on sunday. also putting the social

democrats in the lead. having said that, when you watched the whole debate, the first of three, it is a much more nuanced picture. olaf scholz did win. there were no wow moments in his performance. when you look at armin laschet who came in on a weak position. the spd has been in freefall. he was much more energetic than expected. and the green, baerbock had some very good moments. when it comes to the socially progressive ideas. right now, if germans want change, it is the cdu and the spd that will not be able to provide that. i would argue that olaf scholz won the debate on paper but the other two did a good job to try to jumpstart their campaign. tom: the candidates have less of

the limelight. did we get any details from the candidates? maria: we did not. when you ask market participants, what is that you care about in the german election? they say it is all about the fiscal policy. the program which would have them become more of a federalist germany. yesterday, that did not feature highly in the debate. this is still a conversation through the domestic prism, it is still very much about german national politics. you were hoping to get clarity, to get a breakthrough moment in german politics on those issues but there was not a lot of substance yesterday. tom: september the 26. keep watching this space.

maria taddeo in berlin. coming up, rockets intercepted. as the u.s. withdraws from the country by tuesday. stay with us, this is bloomberg. ♪

♪ tom: welcome back to the open, 30 minutes into the trading day. let's check in on how the markets in this part of the world are shaping up after a record close on wall street. in ring across europe, at the end of play friday, as well. the stocks euro 600 gaining just a smidge, as you can see, capitalists after jay powell's commentary dovish, but we are at record highs in the states. the dax is also in the green, as is the cac 40. the ftse 100 is closed.

it's a bank holiday in the u.k. the ftse mid posting a slightly better picture this morning after of close to 40 points in italy. we continue to watch as we switch over to the grr and a commentary that comes from europe, brussels around any restrictions about u.s. businesses. that is something to watch whether or not they oppose more restrictions given considering the delta variant and u.s. travelers, to help tourism get back onto something of a more level footing. in terms of that gainers, you're looking at chemicals at the top, followed by auto parts. insurance, telecom, and banks, as well, some of the more defensive plays falling out of favor of a more dovish and optimistic commentary from the fed's jay powell. let's get the first word news with simone foxman in doha. simone? simone: thanks, tom.

hurricane iota slammed into louisiana, packing winds of 150 miles per hour, and swapping new orleans with mass flooding. more than 750,000 homes and businesses were without. it could last weeks. [no audio] almost $16 billion after revealing its results for 2025 months late. they booked eight -- $18 million, however returned to profit in the first half of 2021. the debt manager plans to shed subsidiaries and says that should ensure its operations for the next 12 months. 80% of singapore's population is now fully vaccinated against covid, outpacing most advanced economies. senior officials have linked the milestone to gradually open up [no audio] social activities [no audio]

currently has stricter social distancing measures than many capitals outside asia. global news, 24 hours a day on air and on bloomberg quicktake, powered by more than 2,700 journalists and analysts in more than 120 countries. this is bloomberg. tom? tom: ok, simone, thank you. u.s. president joe biden has been briefed on a rocket attack at kabul's international airport on monday, according to a press statement from the white house. the rocket attack comes a day after a drone blew up a vehicle heading for the airport that was carrying several suicide bombers. that is according to u.s. central command. it comes ahead of the u.s. withdrawal on tuesday, tomorrow, the 31st of august. joining us now is our asia government editor, joining us from hong kong. dan, where do we stand in terms of the threat of the assessment of risk facing not just u.s. military personnel at the

airport, but also those remaining evacuees? dan: the risk remains tremendously high. the ministry should's been warning -- administration's been warning about that. at least five rockets were fired towards the airport in kabul, intercepted by u.s. antimissile systems there. but you can see how officials there are concerned as long as this evacuation is continuing that this threat of a rocket could try to blow up an airliner or, you know, we could see an attack similar to what we saw last week, a suicide bomber going in. there was a strike against a vehicle laden with explosives. so, there's multiple threads out there that are active that the u.s. is responding against. and these are going to be remaining there until whenever the final flight is out. tom: yeah, it seems to be an

incredibly precarious situation on the ground. what are the legit logistical -- the logistical challenges of meeting the deadline in terms of getting the last personnel and evacuees out without avoiding further incidents like this? dan: yeah, i mean they're just going tohave to keep doing what they're doing, identifying threats and take them out. the taliban condemned the u.s. for the drone strike. they don't have the authority to do that, and anything that they will do is illegal. so, there's some tension there. the u.s. is relying on the taliban to let certain people through the checkpoints, as well, which is going to continue. and even after this deadline, there are still some people in the country who are going to have to go out. the taliban have said they are going to let the airport remain open and people travel documents

can still leave after august 31. they're mostly concerned about the sovereignty issue of having all foreign troops off there soil at the moment. the u.s. has acknowledged they're going to have to trust the taliban to do that to some extent. so this next week and the next few days are going to be very telling to see whether that can happen. tom: what is the latest we're hearing internationally from the u.s. among attempts to ensure afghan nationals and foreign nationals are able to leave afghanistan? we've been hearing from macron and the u.n. side. what about nato? dan: there's a push by macron at the moment to try to get a safe zone in kabul, just trying to get a response from the chinese on that right now. the germans are saying we want the russians and the chinese to join us for talks on afghanistan, and try and make sure that all these people who want to leave afghanistan can get out. the u.s. has said they received

assurances from the taliban that that's the case. you know, it's hard to see, at this point, given the political consideration in afghanistan that the taliban would let foreign soldiers in to set up some sort of safe zone in kabul, particularly given how everything they've been doing is trying to get american soldiers out of the country. so it's unclear how a safe zone would actually work. but there's definitely a lot of concern and a push to make sure that taliban allow everyone to leave. tom: ok, dan 10 kate, we appreciate you bringing us up to speed on afghanistan, our asia government managing editor joining us out of hong kong. speaking with developments in hong kong, we look into another angle now. turkey says it has security concerns about running kabul airport. president erdogan says no decision has been made, adding anything can happen at any moment, including fatalities.

that's after the taliban requested turkey operate the airport. for more on turkish afghan relations, joining us now is the chairman of istanbul-based think tank. thank you for joining us this morning. how is, then, erdogan and his officials in istanbul, how are they adjusting to the new realities on the ground in afghanistan? >> well, before the taliban takeover, as you may recall, there was already talk of turkey operating at the kabul airport. obviously now, the political landscape has changed. taliban is in power. however, there is this discussion of turkey operating the airport upon taliban's request. however, on the turkish side, obviously it is very complicated. firstly, due to can -- security

concerns. and secondly, it's really about what turkey will expect to get out of this commitment in afghanistan. that's also another part of this complicated calculus. that's not easy to answer by given the operation itself will be quite risky, as demonstrated by the tragic events of the last few days. but some of the possible payoff elements of the turkish decision-making may be that turkey is invested in this relationship with afghanistan as part of nato in terms of state building activities, and they don't want to lose that goodwill and remain on the ground as an actor. if it decides to take over the

responsibility of the operation of the airport, it could be the only nato country to continue with some sort of physical presence on the ground in afghanistan. and that will also matter for turkey's relationship with allies in the west, and particularly in terms of its troubled relationship with the united states. tom: ok, well that ties into my next question which is, given we've seen terribly take him -- turkey take a more active role in the region, in and around syria for example, what is the key priority then for turkey, vis-a-vis afghanistan? sinan: well, again, that has changed in our mostly, obviously, because the priorities were very different 10 days ago compared to now. but now the priority would be that turkey would remain on the ground, and therefore wouldn't lose all the political investment in afghanistan over

the past 20 years. there's also an element of historical ties with afghanistan dating back to the early days of the turkish republic. so, turkey wants to remain as an actor there, and possibly as the only -- as i highlighted, the only nato actor in a country where now the influence game will be between russia, china, india, and pakistan to a large extent. so, therefore, the ambition of turkish makers would be to remain there as part of this goal to remain in afghanistan, and try to leverage this relationship in turkey's time --

tom: you touched on this. how do these events test nato and turkey's role in nato? sinan: well, turkey is one of the members of nato. it has the second-largest in the united states. and some of the most recent decision-making in turkey, particularly the decision to acquire the s 400 there from russia has been criticized heavily by some of its nato partners, so much so that ultimately the united states went ahead and countering american adversely sanctions on turkey. so, the hope is that in this environment, turkey taking the lead as the only nato country to remain in afghanistan to provide security, to provide infrastructure for afghanistan,

links to the outside world possibly going forward, helping obviously, the afghans themselves to go to western countries, all of that will give some political capital to turkey that would be helpful in negotiating future relations partners in the west, and perhaps also push some of these countries, the u.s., where they are, the number of difficult bilateral disputes to have the more positive attitude towards turkey. that could influence on some of these other bilateral disputes, ranging from the as/400, possibly to the hot pancakes going forward, and so on. tom: sinan, what is the ability, the capacity for turkey to absorb additional refugees? sinan: very little, because

turkey has really reached its capacity with, primarily with syrians. turkey is the country that's posted the most number of refugees in the world. and that's a number from the u.n. agency. what we have seen over the past few years has been a political backlash against the situation in question, which has been the political fortunes of the political party, erdogan's party. and therefore, there's very little willingness in the turkish government, but also more globally, to host even more refugees. so, turkey will need to find in search of a formula that is basically stabilize the

situation in afghanistan, but certainly in turkey, will not want to be the host country for refugees, be they afghan or syrian. tom: important insights there. thank you very much indeed. former diplomat, turkish diplomat, as well. record profit. elizabeth gaines tells us the minor is seeing strong demand, profit more than doubled. more on that next. this is bloomberg. ♪

♪ tom: welcome back to the open. we are 48 minutes into the european trading day, stocks just holding very modest gains across europe this morning. one of the world's top iron or exporters saw annual profit more than double to a record high as commodity prices surge. ceo elizabeth gaines spoke to bloomberg about the record earnings. she added they are planning to unveil target of their biggest customs. >> supply is still relatively constrained, so there's been some challenges of supply of iron or. and despite some of the cooling in the production, it is still up a percent to the end of july. we do expect to see some rebound activity, and therefore demand

in the fourth quarter of this year. so we're continuing to see strong demand. we've seen some constraints on supply, and so we're seeing strong demand and a strong market for iron ore. >> how much are you seeing the impact of delta as being a threat to global production, as well as demand? >> well, global crude steel production is actually up compared to last year about 21%. we've seen the rest of steel production up 21%. the market conditions currently indicate very strong recovery from last year's covid impacted levels. the impact of delta is difficult to see at the moment in terms of what we might come through in any numbers. but certainly through the end of july, we continue to see strong conditions, whether that's rest of world or even with china. we're not anticipating any significant impacts of delta, both in terms of demand for iron ore and crude production, but it's certainly something we continue to monitor. >> have you seen any disruption

yet from the impact of delta and the covid outbreak? lockdowns in parts of australia? >> well, it has proven some challenges. so, we do have is cost-based team members. the majority of our workforce, 90% reside in western australia. but we rely on that 10% and having that mobility of labor is important to us. what we've actually seen is the permits in australia decided to temporarily relocate. we continue to supply them with facilities so when they're not on-site, they've got some where they can stay. but there's no doubt that the border restrictions and some of the impact on the mobility of labor is pretty challenging. we're managing it. we've been managing it for a long time now, but it has been a real challenge. >> you said you would be tackling emissions next week.

you previous they refrained from setting a target. has there been a change of heart? >> i think it wasn't a change of heart. we've been measuring it, and actually we've been doing a lot of practical measures, so we've been working with customers on the technical merits of our sign. we're looking at research and development. we're actually really committed to reducing co2 emissions. we haven't set targets in the past because we don't like to set targets without a credible passport. we're at the place with the future industries with the work we are doing that we feel comfortable to set those targets, and have a credible pathway to achieve those targets. tom: elizabeth gaines there. ok, coming up, reacting to the fed, we discussed the markets moved with then ram -- ven ram. that is next. this is bloomberg.

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♪ tom: welcome back to the open, 54 limits and when five seconds -- minutes and 25 seconds into the trading day. the markets are closed. we've got modest gains across the european stocks at 600, investors continuing to digest those comments from jay powell around the pace of tapering and

the sequencing and the outlook for rates, as well. record on wall street, markets in asia were mixed. joining us now is ven ram from our mliv team to dig into this. where are we then in terms of the market focus? we moved on from tapering. are we focused now on things like jobs at the end of this week? ven: morning, tom. yes, we are definitely focused on what jobs will bring about this week. but before that, i think markets will also want to know, while the fed has -- drum pal said on friday taper is likely to veer, what really caught the markets attention is the pace of tapering. previous time around, ben bernanke signs, they went to $10 billion a month. are they going to go at that pace or a faster pace? if they go at a faster pace, that will be a bit more hawkish

for the remarket. i doubt the fed will want to do the tapering at a very brisk pace. i think they will go at my pace, meaning i don't think they will be looking to wind down the purchases before 10 months in up period shorter than 10 months. so that adds to the jobs report. tom: certainly the sense you got from jay powell is that he is not in a rush to get the taper over and done with. at least that was the messaging. just briefly on treasuries and the dollar than. ven: withdrawn powell messaging he is in no hurry and he's also mentioned taper is one thing, but we are going to have far more stringent tests when it comes to hiking rates. that means that there is no transmission into the rates market to sell off, and that means where they are -- we've seen treasury yields come off since friday and they have come

off a fair bit, as well. so higher yield from here. tom: a leg lower in real yields. that is it from the european open. stay with us. surveillance is next. this is bloomberg. ♪

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>> we will shift heaven and earth to help. we will do whatever we can. >> we will continue to talk about the issue of booster shots and those who started the program early met with great results. >> cryptocurrencies are a bubble. i would describe cryptocurrencies as a limited supply of nothing. >> this is bloomberg surveillance, early edition, with