tv Bloomberg Daybreak Australia Bloomberg October 10, 2021 6:00pm-7:00pm EDT
recovery in consumer spending. haidi: taiwan's president said the island faces unprecedented challenges after the city calls for reunification. shery: the prime minister backs new south wales plan to fast-track international travel as sydney prepares to exit more than 100 days of lockdown. this is a picture of cross wall street. we are seeing support for u.s. futures at the open. this after stocks fell on friday. we saw the 10 year yield rising above that 1.6% level. september, the slowest month for job growth this year. leading to uncertainty about what the fed will do when it comes to withdrawing stimulus from the pandemic. we are seeing crude extending gains. it topped $80 a barrel for the first time since november, 2014 at one point. that is leading to more concerns over inflation. the boe governor warning of a potentially very damaging period
of the inflation. we saw the pound gaining ground and snapping the four weeks of losses we saw. we had a weaker dollar on the back of the u.s. labor market data. let's look at the payroll numbers. we fell short of estimates for a second month at 194,000. if you take a look at the bottom right of this chart, you can see the labor market is the only economic sector here in the u.s. that's posting net misses. wage growth remains elevated. we are talking about our average hourly earnings rising 6%, more than double what analysts expected. we will see asian markets react for the first time to these numbers. haidi: really a mixed bag. wage growth site is looking robust. investors will be scrambling to try to reprice what this means for the fed and central-bank trajectory. adding to the potential inflation. this is what we see when it comes to the set up in asia.
we will be watching those airlines in particular, this after the australia government saying they want to accelerate the reopening of south wales. as early november according to some reports. we are watching the aussie dollar i we are seeing it in these with the gains that we saw the pound earlier. take a look at the aussie, just $.73 at the moment. in new zealand, we see a 10th of 1%. chicago nikkei features looking pretty positive, but broadly more than mixed picture as we try to continue to evaluate the inflation outlook. the labor market outlook with all of these disruptions still coming from the supply chain side. it is a momentous day when it comes to new south wales and here in sydney. you have most parts of the state reopening, lifting some of these restrictions as we hit the 70% for vaccination targets of the eligible population. we are seeing things like retail
stores reopening today, restaurants being able to see people again. restaurant dining after 100 days of its lockdown. it will be very interesting, but all of this is happening a couple of months out from the holiday season. we know that the supply chain issues will cause all kinds of shortages. shery: i can't imagine how exciting of a day it can be for you guys. three months plus being under lockdown. we will get more details about those supply chain. earnings seasons upon us. third quarter, it's that time of the year again. we are getting profit projections rising for a fifth consecutive month. this is the longest week since 2005 year in the u.s. companies will have to justify analysts growing optimism. we are seeing the supply constraints, the supply chain disruptions. so far we have seen estimates rising the most for commodity related sectors.
that's not that surprising. j.p. morgan kicking off big bank earnings on wednesday. haidi: as always, another weekend we take a look ahead at not just evergrande, but other property developers. we have another coupon do, but it is this looming debt wall and world of worry for a number of these chinese developers, just beyond evergrande. this is the first high-profile real estate company to run into serious trouble. a lot of economists are saying this is the finals the age of the biggest real estate booms in history. you've got to imagine there will be more casualties here. shery: investors will have to wait for all of that at the start of the week. as well as another cut to u.s. growth forecast for goldman sachs. economists blaming a delayed recovery in consumer spending. let's bring in our global economics and policy editor, kathleen hays, and our mliv editor garfield reynolds.
kathleen, let me get started with you. this goldman sachs downgrade coming ahead of more key u.s. eco-data. what are you watching? kathleen: this was not a massive cut in their gdp outlook , but emphasis on the consumer, they have been looking for 5.7%, that's down a 5.6. 4.4% to 4.0%. they are talking about the virus drag on virus sensitive consumer services. restaurants, any kind of retail establishment, the chip shortage. these are the things slowing us down. one report shows retail sales showing up. they are supposed to be down 0.3%, but car sales fell nearly 7% in september. that's not being blamed on weak
demand, that's being blamed on a shortage of new cars. so what we will really see is a focus on inflation. look at how this chart shows you the year-over-year sales have remained reasonably strong. moving onto inflation. consumer prices, that's the big focus. consumer prices are expected to fall -- they remain at 5.3% year-over-year. what you are seeing now is a very important chart. i would say when you look at what most economists are saying, they think the fed will launch that taper at its november 3 meeting. why, because you have inflation rising. the key indicator is up over 4% year-over-year. unemployment tumbled in that report. it was down to 4.8% from 5.2% in september. you rarely see big declines like that, so the fed has been joining that band of central banks around the world. they see lingering inflation, it doesn't look transitory. they are supposed to start
stimulus. i don't know if the retail sales report could knock them off that course. that's according to economist we have been quoting. haidi: a lot of geopolitical tensions. some strong rhetoric coming out of china and taiwan over the weekend. take a listen. >> those who forget their heritage betray the motherland and seek to split the country at no good end. they will be spurned by the people and condemned by history. >> we hope for and evening of relations and will not act rashly. but there should be absolutely no allusion that the taiwan's people will bow to pressure. haidi: it was the call for a peaceful reunification that gave a lot of people pause. >> well, xi jinping has touched
off the latest round of spyware as you showed by saying and expressing confidence that there will be reunification and taiwan will be reunited with mainland china, which is exactly what the president was pushing back against. and xi also said taiwan will continue to bolster its defense. that whole issue has been in the news the last few days because the chinese flybys of the military aircraft close to taiwan and then the revelation that the u.s. has had some military advisors in taiwan. all of this is the scenario of tension, and talking everyone
down from the notion that they might be across the taiwan strait. the biden administration here in washington has been diplomatic, but i think it's fair to say, very firm toward china in terms of what he views as this encroachment on taiwan. on the other hand, washington has to balance out its economic relationship with china, which is huge. shery: let me turn to garfield and talk about the markets. we have economic uncertainty, we have seen the concerns over evergrande in the gtv chart on the bloomberg shows taking asia's dollar bond, dropping the most since 2013, yields at decades hi. but the csi 300 is seeing its best days and weeks. what will investors be watching this week?
garfield: they will be watching all of the things we are watching. it will happen with evergrande. i think we move past any real hopes that we will pay the coupons that they owe. it's almost one month that some bondholders have been waiting, having written to evergrande asking what's going on with their money. we have group has that. the question is, how does it go ahead? just how badly our foreign investors going to be hit? there is a concern that evergrande will be ring fenced in foreign bondholders will be bogged down when it comes to giving their money back. the chinese central bank told china's banks to make sure that homeowners were -- china's worry
about homeowners not bond owners. haidi: our mliv editor garfield with kathleen hays in our washington editor with our top stories that you need to be watching today. in other top story when it comes to trading in sydney. entertainment responding to the report over the weekend with 60 minutes saying they are concerned with a number of assertions made within the report. it was a dramatic report organized crime, and foreign interference with the australian casino. according to this report by the morning herald and associated newspapers. star entertainment has been the clean casino. other casinos have been under investigation, but they are responding saying they will be taking appropriate steps to address allegations. we will be watching star as the
trading session begins here in sydney. let's get you over to vonnie quinn with the first word headlines. vonnie: treasury secretary janet yellen expects congress to take action to bring the u.s. into line with the global minimum tax agreed to last week by dozens of countries. yellen told abc she believes the measure will be included in a spending bill that democrats are preparing. they took a vix that forward friday as 136 nations agreed to enforce a minimum corporate rate of 15%. the international monetary fund executive board is set to have planned meetings with the managing director in the law firm as it pushes to finish an ethics review. bloomberg forces say the rare sunday mornings were to take place privately. the board met on friday to discuss an audit done for the world bank, which includes -- accuses them of pressuring staff to manipulate data when she was
a top official there. two bank of england officials have reinforced an eminent rise of u.k. interest rates they suggested in the remarks of the weekend that investors are right to bring about rate hikes. it is damaging inflation unless policy makers take action. australians prime minister says he's in talks with a new south wales government to accelerate a plan to open international travel. it's for vaccinated australians returning home via sydney, and allows vaccinated australians to travel overseas. no timeline has been given for reopening the international border. global news, 24 hours a day on air and on bloomberg quicktake, powered by more than 27 hundred journalists and analysts in more than 120 countries. this is bloomberg. haidi: business councils in
australia, the chief executive joins us later this hour. coming up next, the market outlook with global advisors. he tells us how policymakers may respond after the big u.s. jobs. our exclusive conversation with hong kong's chief executive at a: 30 a.m. hong kong time, 11:30 in sydney. this is. -- is bloomberg. ♪
haidi: coming up in the next few days, starting off with the imf and the world bank beginning its weeklong annual meetings on monday. of course evergrande continues to be on the radar. more offshore bond payments come due this week. blue origin delayed its second crude mission which will include the star trek after william shatner.
wall street bank picking up third quarter earnings seasons. j.p. morgan said to report on wednesday. a shift in supply chain crunch. shery: we get to updates to the big inflation debate with data from the u.s. and china. now this chart is showing how u.s. consumer prices in china's producer prices have been really closely intertwined. metrics remain extremely elevated for ongoing supply chain challenges and material shortages continue to add upward pressure. those issues are likely to show up in chinese trade data on wednesday. the bank of korea will likely refrain from back to back rate hike and up for a move we get a policy decision in singapore with the city states third-quarter gdp numbers in that series ahead. haidi: all of this comes after
another bigamist for u.s. payroll. the addition of 190 4000 jobs in september signaled a slowing labor market recovery and further complicates the fed taper calculus. quakes there is a supply issue in terms of labor. >> what held workers back was the delta variant. >> the demand for labor is high. coming back in the labor force fast enough. >> i think it keeps the fed taper on the table. >> the fed doesn't modulate supply of labor. >> they should go in for and begin to taper. the vehicle and is what will they do with the funds? >> that inflation is the biggest focus. let's bring in the managing director of global macro strategy.
always great having you with us in your weekly notes. he actually titled it with the slogan calling it its demand. explain to us the market environment right now. >> great to be back on this so. there is good demand and demand for labor. the more that sophia jamie that remains attentive for elevated prices remain, at some point it will have friction in the economy with the slowing down. it's not the same in the 70's. but on the other hand, this is amazing since the middle of september, the trade has come back through. as much as we may deal with high inflation, the energy sector has
value stocks. still something in the market about inflation that can go a little higher. so i think as we go into this week, watch the cpi data come out, i think it will determine what we are dealing with. probably more reflationary, and i think it was show up in the financial earnings this week. shery: we really have seen the ups and downs for the s&p 500 of more than 1% that we haven't seen for a while. with this volatility and uncertainty over the inflation picture, what will be important that you keep in mind as you try to balance out your portfolio in the next few weeks as we get started with earnings seasons as well? ben: i think what you want to watch we have to stick inflation from the few categories that seems to be broadening. because we are dealing with
delivery planning issues, if you think of it that you have high demand for products that are going to take 2, 3, 1 month longer, inflation will remain. we will see a whole range of categories and demand to push up the prices ahead of this big holiday season while the labor shortages affect the supply chain. you go into the early to next few weeks, the first one is october at one of those big industrial leaks. we will see the real impact of the global supply chain and inflation and its influence on inflation. i think it's functional for the moment that's temporary elevated inflation. it will go into a time where central banks will reassess that. i they are preparing the markets for rate hikes. more will follow as a result.
haidi: what does an inflation or stagflation do for proof portfolio? ben: it's still that combination of if you have sectors that are benefiting from this inflationary stage. it's probably going to stay that way because if energy is up because of its particular demand, issues will get into gasoline and oil. it will reflect those energy prices. if you still think of this, most of the sectors would normally do well and they have not done so well. when you think of value stocks, most of the time that push does
benefit. i think that's the way to go from here at this moment. and so we get better signs. inflation does start to moderate because you can't have this elevated price. it will eventually balance out the supply and demand. i think there are still a number of months to go. haidi: have the markets moved on beyond evergrande, and should they? you look at their ring fencing and localize soft landing, what should be the main concern for global investors? ben: the main focus has been that the pboc is good by injecting liquidity at the right moment. it was true liquidity on friday but pushed more on saturday. they are doing more of the tactical liquidity operations. so that seems to be looking at
the markets that would be priced in from the situation. he cannot ignore because with the property sector being 36 percent, china gdp has people downgrading china gdp. so i think that's the key from here. if the macro outlook does vary, then it becomes a big issue. haidi: right. always great to have you with us. the managing director of global macro strategy. a quick reminder, don't miss our exclusive interview with hong kong's chief executive. we do have much more ahead. this is bloomberg. ♪
covid lockdown. hong kong's covid zero policy will be a big focus in our conversation with the chief executive, carrie lam, and a couple of hours time. plenty more ahead, this is bloomberg. ♪ it's moving day. and while her friends are doing the heavy lifting, jess is busy moving her xfinity internet and tv services. it only takes about a minute. wait, a minute? but what have you been doing for the last two hours? ...delegating? oh, good one. move your xfinity services without breaking a sweat. xfinity makes moving easy. go online to transfer your services in about a minute. get started today.
sending for military planes into the islands defense zone while the u.s. held military exercises nearby. goldman sachs economist have cut their forecast for u.s. growth this year and next, blaming a delayed recovery in consumer spending. in a new report they expect growth of 5.6% on an annualized basis in 20 to anyone. down from 5.7%. 4% growth down from four .4% previously. they had upgrades to their projections for the following two years. results for elections are expected within the next 24 hours according to the commission. the vote is an early test for the prime minister. he has been unable to form a consensus in iraq's structured politics on tacking domestic issues and political capital and brokering cost between iran's power and saudi arabia use -- saudi arabia's monarchy. global news, powered by more
than 2700 journalists and analysts in more than 120 countries. shery: the u.s. secretary of labor says the september payrolls report shows the continued strain on employment on the covid 19 pandemic. he cited concerns of the delta variant and people changing some of the reasons for the week job numbers. he spoke to bloomberg's jonathan ferro. >> it's about the pandemic. this is not just an american issue, it's a worldwide issue. we clearly have more work to do. people are concerned about the delta variant and their health. for valerio evaluating their work/life balance and changing careers. i would love to see more and higher numbers. this is a very complex report. we looked at areas like the hospitality industry were we had 74,000 jobs to gain. there is a correlation to not having more gains because of the delta variant.
public education in those numbers are far lower than where anyone anticipated. i think that's what the forecast was hoping for. seeing a larger participation in the public sector and educational space. we are diving into that number now. jonathan: female participation, demand is fantastic. open jobs in america south of 11 million. what's the administration doing to support that return to work? what is the effort that can? make an immediate difference i'm not talking about a difference two to five years from now, but what are we doing now for results immediately? >> schools are helping. schools being back in session. we saw unemployment rate for women fall to 4%. unemployment rate for black women felt. it's going in the right direction. particularly where we were three months ago when we had 4 million women out of the workforce.
we are seeing lots more women come back into the workforce. we need to continue that trend going forward. jonathan: do you think vaccine mandates are helping her hindering this effort. calexico get more people confident going back into the workforce. the more people we get vaccinated the more confidence it gives everyone. i feel safe going back to a restaurant or going into a store shopping. jonathan: the labor department is issuing a rule to require all employers with more than 100 people, whether they work for the federal government, to ensure their workers are fully vaccinated or faced testing once a week. how receptive are employers to that message? >> a lot of employers want to see what the rule looks like before they get their opinion i have heard from employers -- i'm
looking forward to it. we are later concerned about what happens if we can get people vaccinated. we will be working through those over the course of the next several weeks. jonathan: how receptive are you to the message? >> i've gotten no pushback from unions. people want to get the economy opened up and get people back to work. they understand the safest way to get people back to work is by having people vaccinated. people that don't want to get vaccinated, the safest way to go back to work is to wear your mask tested. the testing shows people don't have the virus. jonathan: this is the final question, how receptive are minority groups who have been hesitant to get the vaccine over the last year? the last thing we want is to initiate some roles that cuts off the part of society from being able to go to work or into a restaurant in new york city. what is the outreach light for
minority groups? how respective are they for the vaccine mandates? >> we saw that communities of color, particularly african-american and latino communities were disproportionately impacted by the virus, with higher rates. and there is distrust in the medical system. we have work to do and we will have to work with mayors around the country to continue to build the trust. jonathan: do you think they will be disproportionately hit these rules? >> this is across-the-board. this rule is for every american that is not vaccinated, that works for a company over 100 people, that the choice will be vaccination or testing. haidi: the u.s. sec. of labor, marty wash. after more than 100 days of lockdown in new south wales, we are easing covid restrictions with more than 70% of residents that are fully vaccinated. the prime minister wants to accelerate the return of
international travel into sydney. take a listen. >> the governor is looking at ways to fast-track home quarantine. and if that happens, we will be able to move to facilitate the opening up of the international border into new south wales sooner. that would mean a home quarantine for vaccinated australians wishing to return home. and given the option for international travel for vaccinated australians to leave and to return. we still have to take one step at a time, safely, and ensure we always put that safety first as we reopen our country. haidi: things are happening very quickly. with the change of premieres we actually saw even more restrictions being lifted as of today. >> a number of things have been sped up in the local media has been describing today as freedom day, which is stretching it a bit. easing day might be more
appropriate. pups, cafes, gyms, hairdressers and social distancing requirements in place. travel restrictions around sydney have been eased. 3% of the population in the state is now fully vaccinated. more than 90% have had their first dose. the vaccination rollout has sped up and it has been very impressive. that's why the prime minister is making those comments that the next step would be to get the international border open into new south wales. the goal hinges on how to make that quarantine system work. the prime minister said they would like to see it happen sooner, so it's rather vague at the moment. there has been a lot of speculation that this could begin on the first of november. haidi: let's bring in the chief executive of the business council of australia. a lobby group that represents many of the country's biggest companies. great to have you with us. this is a day of relief are a
lot of people. are they adequately prepared given the infrastructure behind checking vaccinations and how many people you can have in a given space? is it down to the businesses themselves to try to enforce? >> they have been working on this. the world government is good at working in detail. of course they have a lot of practice. businesses know what to do. they have antigen testing in place. this is more like precaution medical restrictions in place. the business really test know how to do this. today is a day of great relief, great optimism.
people being booked out for months. it will be big on the economy leading up to christmas. haidi: i'm sure we will see it for pups as they reopen. how quickly do we expect to bounce back in the hardest hit segments of these businesses, particularly as we deal with this melding of crises with supply chain concerns going into christmas? >> the first thing we need to do is make sure were not going back into lockdown. making sure the premier is careful with no more state lockdowns. we need to get our domestic borders open and keep them open. those are the things that drop supply chains. then we need to get international labor into australia.
whether it's in restaurants on the agricultural sector. we need to get international students back a part of the economy. we really need the government to sit down and work out how we do that. it will take hospitality a little bit longer. we might need to do things like small business startups because there's a lot of restrictions in place. the economy really bounced back strong -- fast. shery: we continue to see numbers creep up. 112 new cases in the past 24 hours on top of new south wales recording 496 in the past day. tell us a little bit about your members plan in order to keep businesses and their employees safe, and what sort of guidelines have you received
from the government and support coming from government regulations? >> it shows the power of the vaccine. we know that data is overwhelming. the transmission drops by over 80%. we know the vaccines are working . we have had good cooperation to get people back into offices and back into retail. there is a lot of detail about how that will work in practice. obviously a lot of companies are saying it's a condition of employment. they want to see people fully vaccinated before they come into the office. there are daily calls with the government to make sure we do this safely and do this in a way that we can sustain it.
sustaining a need to stay open. we can't keep stopping and starting. >> another huge effort from the business council of australia has been when you come to climate targets, the policy papers are coming from doubling the flash carbon pollution. tell us about the main objectives and how you are coordinating with the government that has been heavily criticized over there climate goals. >> a very important piece that we raised last week. our objective has always been to get connected by 2050. the question has always been how. how to get there by signaling investment. by bringing forward earlier action in the greater level of ambition and that 2030 target to bring forward the commission.
in the emission reductions. but to also start sending the signal. we have a big plan for the buying share of new opportunities. we have called for -- and the markets to create the market. please called for continued work . we have called for continuance on technology. but our plan is very much using the government's architecture, which is actually very good. if we have it there and here we can bring forward and send the signals to drive that investment. and we believe it's workable, it's ambitious and attainable
plan. haidi: one of the government's major issues with taking stronger action is how that transition will hit jobs workers in australian people. given that you represent major employers and powerful companies. is there a plan to be able to d carbonized quickly enough but also preserve that labor market element? >> absolutely. the big mistake is that by doing nothing, nothing will happen. the markets are moving very fast, even if it's taking action. they are taking action action to get to the neck -- they are taking action to reduce the action getting to net zero. they are going to power up
factories. there are huge opportunities for communities. the challenge is to get those opportunities to get in early and make sure australia gets the long share of those. haidi: really great to have you with us and we appreciate your time. jennifer wescott speaking to us as new south wales starts lifting from restrictions. sticking with climate, this is really fascinating, a class-action lawsuit claiming that the australian government is leading investors by failing to show the risks and bonds. government lawyers failed to get the case dismissed. we hear the lawsuit could continue with a class action, but officials from the office of financial management will be subject to the suit. this is according to the court. they are keeping an update. it is just really compelling how the different ways that we are seeing citizens and corporations
adjust -- address these climate risks. shery: it is a 24 year law student. the next generation is really trying to take charge of what the climate crisis will be -- will bring for them. we have seen a surge of litigation, not only in australia but europe to mexico in the past five years. it's just corporations and activists using the course of pressure government. at a time when investors are trying to really understand what this means for the global bond market, four markets trying to factor in the climate crisis. this is a discussion that we will continue to have. plenty more ahead. this is bloomberg. ♪
>> we will have more jobs at higher quality. consumers will have better products, electric cars are better than engine or combustion cars. we can do that in every sector of our economy. we can improve our agricultural systems. we can return the natural world to the fabrics of years ago. haidi: jeff bezos said governments have to be more ambitious when it comes to climate their a effects of beryl
for the first time since november of 2014. this comes as the global energy crisis boosts demands at a time when producers are keeping supplies type. joining us to discuss liz -- we have had such a volatile ride. is there any kind of end in sight when it comes to the roller coaster? >> good morning. i don't think so right now. this the seventh straight week of gains for the u.s. secretary benchmark completing last week. 20 14 the market rose about 100 bucks a barrel. whether we are going again is a lot of question on minds. it does not look to be anything to switch the momentum at the moment.
as you mentioned, opec has been a little elected that at some flight to china for the market down. they're looking at how far the market plunged when it hit us next year. they are not going to be in a hurry to put that supply in. and the demand is rising quite -- quite strongly as the pandemic recovers. we have that crunch in the european gas market as they look for an alternative to gas. just to get any kind of fossil fuel supply. i don't think there is any change and i think the momentum will continue. shery: really a dark backdrop when we had to -- in glasgow.
james: the pro-fossil fuels lobby will latch onto this and has been in the clean energy transition and energy security. part of the reason for this crunch is problems with renewable supply and reports that the generation does not mess expectations and parts of europe that has a supply crunch. i think the reality is a little more nuanced that has disruptions to gas supply. so we cannot pin this all on renewables, but it certainly the highlight and that clean energy transition when a lot of companies are focusing on investing in renewables projects. it's just not the new supply of gas and oil meeting that surge in demand. and that's what people are focused on right now. shery: bloomberg metals and mining reporter. of course, a reminder that we do have that exclusive interview coming up later with hong kong's chief executive.
days of law down restrictions. retail reopening on nonessential services reopening in restaurant and dining. being able to proceed as well. we are seeing markets looking pretty mixed at this point. still a lot of investors really digesting that jobs report from the u.s. on friday and implications for the central bank. we are also hearing about crown sydney casino that new south wales regulations have an interim license to be approved. another one to watch. they say media report stated and expected money laundering, organized crime and fraud at its australian casinos are misleading. they will take steps to address those. our reporter has been tracking this. you spent a big part of time covering the similar story. was it a surprise that this bombshell report came out over
the weekend pertaining to star? >> good morning, haidi. the reports are allegedly star entertainment and enabled money laundering, organized crime and large-scale fraud at its casino does have clues of similar reports made by the same parts of crown results in 2019. those led to the inquiries into crime for the casinos that are coming to a climax like this week. star entertainment alleges that stars board was warned in its anti-money laundering or failing and they cite internal documents, court cases, law enforcement intelligence briefings, and they say sources with knowledge of stars operation.
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