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tv   Bloomberg Daybreak Australia  Bloomberg  July 4, 2022 6:00pm-7:00pm EDT

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asia's major market open. it is rate decision day in australian with the rba see hiking for a third straight month and signaling more tightening ahead. haidi: president biden may announce a rollback of some u.s. tariffs on chinese goods this week as he looks to curb inflation. david: and credit suisse is cutting dozens of frontline roles in the asia-pacific as they grapple with losses and a weakening economic outlook. good morning from the asia-pacific. hope you are all well. a quick glance across the markets across some of these metrics. a quick glance at europe how we closed overnight, .5%. u.s. futures down about 10 points or so. you want to pay attention to
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sectors. energy giving a move up in oil and a consequent move up in energy related currencies. we will get to that in a moment but this is certainly the starting point. what are you seeing? annabelle: on that rally we are seeing in oil we are also watching the commodity linked currencies in asia. seeing the aussie dollar turning positive. down around one third of a percent. the dollar fractionally higher. some strategists say what we are seeing is positioning for central banks i've -- outside the u.s. to drive weakness moving forward. speaking of central banks, the major one we are watching his australia's central bank. 25 of 26 economists seeing a .51 hike. -- a half point hike. it could drive a further rally in the aussie dollar moving forward. equities wise we are pointing to a muted start here for trading.
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we have new zealand coming online fractionally higher despite between fears we continue to see in markets which is sluggish growth coupled with starboard inflation. macquarrie bank say that volatility is not going away. this is just a breather what we are seeing in markets right now. but all about what we get from the rba today. haidi: we have seen the rbnz at the forefront of being one of the most hawkish central banks in the world. we are getting some data at into the idea that perhaps recession risks are on the horizon. new zealand business confidence falling to a two-year in the second quarter according to numbers just in. we have the 11 month budget deficit coming in after we saw overnight a big fall when it comes to the kiwi dollar, sliding as much as 1.5%, the lowest we have seen for the kiwi in 13 months. we will be watching the kiwi aussie pair today given it is rba day. we see australian assets egging
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for this supersized 50 basis point move. the risk is if we get a smaller hike from the rba. does that say there are more recessionary fears than are currently being priced in by the markets? take a look at this chart when it comes to what is currently being priced in by market participants. the rba see hiking quite a lot. when it comes to implied rates about 100 plus hikes coming by september. david: really how they guide markets words what markets are already pricing in and what they say about what happens with the housing market which i guess will get to in a couple minutes. it is also a busy day as far as other metrics are concerned. on that theme with inflation we have two prints coming out of the asian pacific. south korean estimate is about 6%. in the philippines to after is after that at 6% is the estimate. of course various
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forward-looking measures. tmi numbers out of japan and the pmi composite at of china. quite busy on the docket today. haidi: the rba will no longer wait for evidence of wedge growth for hitting the brakes on policy support. our economics reporter has more from sydney looking ahead to the day's decision. so what are the options here for the rba? swati: the rba actually has no options but governor philip lowe did a business event not too long ago a couple of weeks back where he was really transparent and open about what the board will do and his thinking. and he was very clear that the decision, either the 25 basis point increase or the 50 basis point increase. he made it clear these will happen. it was just the size of increase
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that was being debated. at that time markets were expecting a 75 basis point hike. but after his comment that kind of got pulled back. so now the expectation is just 25 basis points or 50 basis points. david: if i look though at his, at least recent history -- david here, by the way -- how high is the probability of any potential surprise for today? swati: hi, david. you are right. he has managed to surprise markets quite a bit in recent times. and he had said something and ended up delivering something else. so there is that risk today as well. however, the fact it was not too long ago that he came out and he was really clear in his message
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that the interest rate hike decision be either 25 bits or 50 bets. -- bits. it's unlikely he will walk away from that. he is already suffering from some level of reputational damage and credibility hit from the past decision. so he is cognizant of that and he also cognizant of the fact that markets are pricing in 50 basis point increase and that inflation could grow out of control. so yeah, fingers crossed hopefully will not be a big surprise. haidi: recession fears are quite heightened globally. is the outlook the same for australia? swati: actually in australia, economists are not following the session. economists have downgraded their projections for australia's gdp growth.
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they still expecting growth to be in 2% to 3% range annually, which is not bad at all. and that is largely driven by the fact the job market is really tight. we had a job vacancy number today which was extraordinarily high. unemployment is at a near 50 year low and it is expected to fall further. household savings rate is high compared to other countries. and people have a lot of extra savings in housing wealth as well, even though the property market is starting to cool. the expected correction is really small compared to the run-up we have seen in recent years. all of that together signals an economy that is hot and expected to keep running despite interest rate increases. david: great stuff.
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swati pandey, our economics reporter. the big news also the last 24 hours, president biden, this is from chinese tariffs, may announce as soon as this week a rollback of some u.s. tariffs on chinese consumer goods. this, of course, as the white house looks to act on surging inflation domestically. or more, let's bring in eric martin joining us out of washington. has a decision been made and what do we know? eric: thank you for the invitation and for the question. what we know president biden said last month was he was in the process of making up his mind about what to do about these tariffs. these are tariffs on more than $300 billion in imports from china that were inherited by the biden administration from president trump. these were first imposed by president trump in july of 2018, so we're coming up on the four
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year anniversary this week. and we know the president and his cabinet have talked about, particularly the treasury secretary, have talked about the inflation impact of these tariffs. seeing inflation currently at around 8%, the highest in four decades. and looking at all the possible ways to curb inflation and to provide some relief on cost-of-living for americans. haidi: is there a guarantee that cutting these tariffs would mean a pass-through to the u.s. consumer? have there been any pledges by retail companies, for example, that that would happen? eric: we understand from our reporting that there was a conversation reaching out to the retail industry. to see if they would commit to actually lowering prices following any tariff reductions. but our services else the
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executives rebuffed that request and said it was an unrealistic expectation. this is something the u.s. trade representative as expressed skepticism about how much this tariff reduction would help in terms of providing inflation relief and she has underlined recently the leverage that these tariffs give the u.s. in terms of conversations with their counterparts in beijing. so this is something we know is being debated within the administration, and that there are voices on both sides are growing both for and against any kind of tariff easing. haidi: bloomberg's eric martin with the latest. let's get you the first word headlines now. police in chicago are hunting a gunman who killed at least six people and wounded dozens more, opening fire on a suburban independence day parade. a high-powered rifle was covered from a rooftop what the shooter remains at-large.
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president biden says he is shocked by the violence. just last month, he signed the widest ranging gun violence bill passed by congress in decades. ukraine says it needs $65 billion is here to meet its funding requirements. the amount excludes defense spending and is part of a larger blueprint for reconstruction. that is estimated to exceed $750 billion. the recovery plan was unveiled monday including three stages extending over the next decade, starting with rebuilding critical infrastructure this year. unknown hackers say they have stolen data on as many as one billion beijing residents. it could be the largest cyber security breach in china's history. the attackers are asking for 10 bitcoin worth about 200 thousand dollars from the data -- worth about $200,000 in the data. more evacuation orders have been issued for flooded parts of sydney's northwest and southwest.
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emergency services received hundreds of calls for help overnight, mainly from people stuck in cars in rising water. further heavy rain is forecast. winds up to 90 kilometers per hour could bring down trees and power lines due to saturated soil. and those are your first word headlines. david: let's have a look at what is coming up in the show. it's rba day and the central bank are set to announce their first-ever back-to-back half rate hike. goldman sachs joins us in about 18 minutes and we will get there preview. also coming up, 2023 is perhaps a story to look at. medium-term and clear risks remain. that conversation is just ahead. this is bloomberg. ♪
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>> our base case expectation is not for the session. we expect continued monetary tightening. you may see a technical recession but what really matters when you are thinking about the investment landscape and opportunities in fixed income sectors is the magnitude and sort of the couch risks of that recession. david: that was goldman macro strategist there talking about their expectations on a coming recession, or not. george boubouras is with us, head of research at k2. i'm hurt and i feel betrayed. i am getting a lot of these sale
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side reports dropping in my inbox, and just judging on the batting average, a rounding er ror virtually close to zero of these guys who were right. how much degree of confidence can i attach on anything looking at the second half? george: yeah, look, great question. always remember, we are trying to predict future earnings, future credit conditions, future economics, therefore it is always moving. we know very clearly what the u.s. fed is trying to do with other central banks. rba is trying to catch up, bank of england. tightening credit conditions are underway, raise rates as quickly as possible to neutral and above. correcting the deal with the obvious price pressures and the base effect of the index. that is what we are trying to engineer. in the face of it, aggregate earnings in the western world
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and household credit conditions and savings and labor markets in the western world are in a good position to be able to handle this pain that is only going to get worse in the second half. but the point is, the earnings will start contracting in the second half, look for confirmation of it. how much to start making the macro slowdown, and there could be multiple expansion on the back of that with the denominator. taking that step back and reflecting on it, capitulation is the wrong trade here for equities. we're bumping along the bottom we will be here for some time. but that valuation is compelling enough that on the average u.s. recession, the s&p 500 down between 33% and 35%, we are nearly there, working our way through. we do not think this is a steep and unforgiving recession. it could be a potential soft landing to a technical. but the reality is most of the damage is there, they will not
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recover in a v shape, and let's look at earnings downgrades coming through to match the macro conditions. david: what about things like correlations? we have seen a 60/40 portfolio did not do very well in the first half. equity bonds, what happens there in the relationship between the two asset classes? george: 1994, for those who were around at the time, you got annualized numbers where the correlation was very high for a negative for bonds and equities. the first half replicated that, which was not very good for portfolio theory, and that puts the sharp pressure at question. but it is a bit of tongue-in-cheek, where in the second half of the year we see fixed income as an asset class unsecured and not sovereign high-yield. fixed income as an asset class would be lower correlated going forward versus the equity asset class who would go to a more normalized portfolio theory. and what happened in the first
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half we do not think will be extended for the calendar year like 1994. there are opportunities in there. when do you buy duration, that will be sometime in the second half or early next year. before this of the curve is not indicative of the inversion we are expecting to come as rate cuts should be priced in in 2023 and q1 of 2024. but the base case is the lower correlation between fixed income and asset class equities will resume to normal from the second half of this year. haidi: george, if you continue to see strong supply-side pressures and a strong structural situation when it comes to commodities investment, does that mean that australia is still pretty well-placed? george: broadly. australia is a small open economy, net energy, food exporter. so that tends to be the cushion and it is the reason it went 28 years without a global
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recession. but households are going to feel a lot of pain domestically. but there is a broad question there. materials, metals, the transition of energy for the decades ahead, still requires precious metals, rare earth that australian has. the box is going to be in demand for australia. that is a broad cushion to prevent two negative quarters in australia but domestic demand will be very much a recessionary scenario. but in the main, australia is well-positioned. and china substituted the way into russia, some commodities, it can substitute back into australia next year, particularly with bonds reaching out, trying to get some tariffs reduced, which is common sense. biden going to help with the oil reserves, etc. everyone is doing what they should be doing. the best stimulus were sustainable, not going back to 2019, and trying to match the
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earnings environment with marginal adjustments to global trade. but the supply chain disruptions are here to stay for a number of years. haidi: david was talking about the breakdown in correlations before. i wonder what your thoughts are on bitcoin, and the thankless task of trying to predict if we have hit a bottom. george: it is a thankless task. disclaimer, at k2 we were the first to partner with gemini, state street, to launch australian's first bitcoin atf, so that needs to be acknowledged. there seem to be so many binary views of it. i will put it in the bucket of a hedge fund strategy. you have 14 to 18 different hedge fund macro strategies in your portfolio, you should not have more than 3% to 5% within all of those bundled. bitcoin belongs in that and ethereum. the rule of thumb is just them, don't touch anything else from a
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portfolio point of view. volatility is excessive, it is a voluntary -- it is a volatility currency. notwithstanding what i have said, it is very different to go -- difficult to protect. but obviously bitcoin is not -- haidi: george, always great to have you with us. george boubouras joining us from melbourne. you can get a roundup of the stories you need to know to get your day going. terminal subscribers can get it at dayb . this is bloomberg. ♪
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david: welcome back to the show. a quick check of the latest headlines. credit suisse is said to be
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cutting more than two dozen frontline roles. our sources say they are grappling with losses and a weakening outlook for the global economy. the reductions fall across businesses including dealmaking and trading, with more cuts expected to follow in the fourth quarter. bloomberg has learned a led by kkr is the front runner for estate in the wireless tower unit. sources say the package is more attractive than the rival's proposal. deutsche telekom is expected to make a decision on this this week and it may be valued at $20 billion. coinbase backed crypto lender vauld nad -- has hired advisors to explore a restructuring and it is a restructuring and it is suspending trading and deposits less than three weeks after saying it was processing as usual and would continue to do so. the company joins rivals in
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resorting to last-ditch measures to survive the market rout. haidi: let's take a look at the day ahead for australia and new zealand. and of course there is one major thing on the agenda. economists expect in rba to raise rates for a third straight month later today, signaling more big hikes to come as it tackles escalating inflation. they intend to use 4200 kilometers of high-voltage undersea cable to export power from a giant solar and battery complex in northern australia. we are also watching these floods in and around sydney. more evacuation orders were issued this morning. getting more on the rba policy decision ahead. we will be speaking to goldman sachs's andrew boak book specs the central bank to hike i 50
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basis points, the second back to back 50 basis point move. goldman were one of the few economists to get it right at the last meeting. david: so really looking forward to hearing from andrew. and the aussie dollar snapshot, 69.69 right now. ecb minutes this weekend. the u.s. jobs report to give you the week ahead. weakness in the japanese currency. what else is new? what you don't see on your screen, swiss europ -- plenty more ahead here on the show, so keep it with us. this is bloomberg. ♪
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david: you are watching daybreak australia. let's get you your first word headlines. president biden may announce as soon as this week a potential
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rollback of some u.s. tariffs on chinese consumer goods. but a new inquiry into industrial subsidies could lead to more duties into teaching areas including technology. our sources say biden has not yet made a final decision, and a move would mark has first major policy step on trade ties between the world's two biggest economic powers. speaking of the other side to that equation, china is set to invest up to $3 billion in indonesia's wealth fund. it is part of an agreement signed by china's silk road fund and indonesia's investment authority to strengthen economic ties. the indonesian president aims to have $200 billion u.s. in the fund in the next few years and other investors are still being invited to contribute. over in singapore, policy makers and regulators are considering new crypto rules to contract -- to protect consumers
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as prices plunge. you central-bank chairman says that may include imaging retail participation. a $2 trillion market sell up has engulfed a growing list of players, including singapore-based terraform labs, whose terra usd stable coin, as all of you know hopefully, imploded. another singapore lenders says it is looking at a possible restructure. russia's seaborne crude exports rebounded last week but shipments to asia slipped. crude flows from russia ports were up week on week by 23%, but supplied to the asian market was down more than 15%, both on a weekly and four week average basis. china and india had been stepping into buy russian exports shunned by the west in response to the invasion of ukraine. and those were your first word headlines. haidi: the rba set for a third straight interest rate rise on tuesday, likely to signal more
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in the coming months. our next guest is one of just three economists who got it right the last time when it came to the outsized hike. let's bring in goldman sachs's chief economist andrew boak. great to have you with us. the consensus is to see back 50 basis point hikes. i want to see the one data point you flagged for us will be key. we have been talking a lot about the fragility of the australian household and the australian consumer as well. taking a look at the breakdown of household income to credit, and what we are seeing is the impact of rising rates. what would the rba be concerned about right now? andrew: good morning, and thanks for having me on. you are right, i think this is particularly interesting chart, because it as a lot more context to the discussion around the sensitivity of australian households to higher interest rates, and their capacity to sustain higher interest rates.
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it highlights that there is a lot more nuance i think, or discussion around australian household debt. and the very unusual situation we are in at the moment where financial buffers are very large, unprecedentedly large. so it adjusts for household deposits and also offset accounts, and it makes the point that net debt has fallen materially since the global financial crisis. i do not think that is well understood. it has fallen from over 100% of household disposable income to about 75% today. if you were to take that a step further and factor in liquid assets like financial assets, net debt on that basis has fallen to zero. so i think one of the important implications of that situation is that even on a 3% cash rate, which is around what we are forecasting by the end of the, aggregates, debt servicing
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metrics, do not become prohibitively strict in australia. and so, we think that households can sustain materially higher interest rates over the next six months. we're expecting a 50 basis point rate hike today. another couple 50 basis point rate increases after that, a slower pace of tightening in the december quarter, and a terminal rate of 3.1%. haidi: and a jumbo, jumbo sized 75 basis point is not out of the question. but is there a about where neutral is and will we get to with your nostril you? andrew: that is right -- get to it here in australia? andrew: i do not think you can completely rule out a 75 basis point rate hike, given we are seeing the fed moving in those supersized increments. and given that over the past couple of months we have seen the rba prepared to surprise markets on the hawkish side. look, there is always uncertainty as to where the neutral equilibrium rate is.
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our assessment is it is around 2.5%. if you think about australia's real cash rate, it is measured by the nominal cash rate, less inflation, that averages about 0% in the decade between the global financial crisis and the covid shock. but there are ups and downs during that period that the australian economy broadly achieved 2% to 3% inflation and fairly low on employment. our assumption is once we are through the covid distortions, once fiscal policy is normalized, we will move back to that situation of a zero real cash rate, and given we have an inflation target of about 2.5%, that is what we are expecting to hit over the very long run. you will need a nominal neutral cast rate of around 2.5% to keep the economy stable and that scenario. a lot of uncertainty, there are risks in both directions, but we
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think a nominal neutral cash rate about 2.5% is about a central scenario. and so on our terminal rate forecast of 3.1%, that is about 50 basis points north of neutral, so we think contractual policy settings will be required for a little while to bring inflation down. david: let's attach another timeline to that. so, we will have to be, i guess, to your point, on the tighter side of neutral. when do you think the rba starts reducing rates? is that a 2023 story? andrew: it is certainly a feasible scenario in 2023. it is not our base case. i think the base case in the near term to the hawkish side, so, lenexa six months. and over the longer run, 12 months, say, and beyond that, to the dovish side. in our central scenario, tighter policy generates some slack in
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the labor market. the unemployment rate rises a few tenths of a percentage point. only back to target by 2024. so, if that's the central scenario, you are not likely to see rate cuts before then, absent some sort of external shock. david: andrew, as it pertains to big parts of the real economy, what are your assumptions on how this banks pass through, and more generally, what do you think will happen to the housing market? andrew: i think retail banks, the big ones, are likely swimming in margins. net interest margins tend to do really well when you have a rising environment because they can reprice mortgages much faster than they reprice their deposits. so, we have not seen it yet, and it is not our central scenario, but we would not be surprised if
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we did not see later in the tightening cycle, and perhaps in the next year, a lot more competition from mortgages across the major retail banks, and perhaps larger discounts provided certainly to new borrowers, and perhaps even across the back walk as well. and so, i suppose the transmission of monetary policy in that scenario would be more muted than it would otherwise be. the reality is rising rates are great for banks and their margins. so at the end of the tightening cycle do not see all these rate hikes passed through, which would obviously be helpful for households. on the house prices, we're expecting sizable adjustment there. 10% peak to trough decline over a year or so. it will be much larger in real terms and larger in some areas, but overall we think it will be a manageable adjustment.
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haidi: final word on the aussie dollar, which is facing these conflicting forces, the global recession risk and risk aversion not good for it, but at the same time commodities stories to really strong. and the potential rollback of china tariffs as well. andrew: yeah, so the aussie dollar is currently courting crosswinds between, i suppose, the tailwind from the commodity price dynamic that you're talking about, and in terms of trade in the moment at australian, they are at a trading high since the 1850's gold rush. but in the near term interest rate differentials with the u.s. are a bit of a headwind, and concerns around a global recession are likely to weigh on the aussie dollar near-term. so we expect the letter dynamic will win out but in the near
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term we are expecting it to trade around current levels the next three months. looking further ahead as we see the rba tightening cycle mature, commodity prices remain high, we expect the aussie dollar to move higher, particularly if some of these negative risk sentiments a cloud global recessions, u.s. recessions, starts to ease. so we have the aussie moving to around $.73 on a 12 month. david: andrew, great having you. thank you for making time, and looking forward to speaking with you again. andrew boak out of goldman sachs, chief economist for australia and new zealand. looking at the bond markets in australia, the rally continues. that is the short of it. we have only seen yields move up once in the last three weeks or so. so when you look at this, what are we seeing? we're looking at essentially 10 year yields at 50 day moving average. on be shorter and we are little below that right now. ok. i will leave that there and tell
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you what is coming up on the show. ukraine is laying -- laying out a reconstruction plan. the cost of recovery and rebuilding. we will help you tally up the potential bill on that. that is coming up next. this is bloomberg. ♪
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>> this war is not only our war, it is not simply a local war in the east of europe. no, it's a russian invasion against everything we hold dear. therefore, the reconstruction of ukraine is not a local project, it is not a project of one nation, but of the entire economic world. >> russia should absolutely contribute and people of russia should contribute to repair the damage caused. >> that is interesting, because a lot of people say vladimir putin will never pay a cent. but you believe they should? >> absolutely. i do not think this is contested, by the way. i think there is broad consensus that given the circumstances of this war of aggression and what has caused this devastation, of course there ought to be also reparations from russia. in the appropriate way.
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haidi: the ukrainian president and the oecd secretary-general speaking at the ukraine recovery conference in swizzle and. ukraine says it needs $65 billion this year to meet its funding requirement but pledges from the global community have fallen short. we discussed how ukraine's allies might be able to cover that level of spending with the european bank for reconstruction and of element. >> it is difficult to assess because the war is still going on and there is still destruction going on, so it is difficult to have a definite figure. but i think the shared assessment is the level of infrastructure destroyed is around $100 billion. >> so, big number. >> and of course you have losses of opportunity, loss of capacity to develop, to sell your business and so forth.
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so losses and the impact on the economy is huge because the assessment is the economy will shrink by at least 40%, 50%, which is a huge loss of capital and revenues. >> and of course the eastern part of the country appears to be almost fully destroyed in some areas. but i wonder, that is for the long-term. when you say 100 billion euros, is that over 10 years? >> that is only for the infrastructure. >> then comes a bigger package? >> yes. then you need to provide equity for the companies, the banking sectors and so forth. >> so more than that. i have heard some analysis that says even one trillion euros could be in the cards. but in the short-term, it seems the fund in needs for the country recovered for the year. i spoke to the german finance minister. but the talk again of a debt restructuring, even potentially a default of ukraine, that is picking up some momentum.
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what was your impression when you spoke with the ukrainian delegation? can they weather the storm? >> there has been a lot of focus, rightly so, from the international community to cover the budget. following the g7, the u.s., big g7 countries all committed to finance the 5 billion needed per month in the short-term. so this is in the process of being implemented. it takes time because you have to go through parliament to find a way to get the financing and the eu is working a lot to getting financial assistance. so it is a process in the making. it should give visibility to the government for the next month. david: that was the european bank for reconstruction and development president speaking with us. a little bit of a theme here, obviously the energy crunch, and this smelt up and prices, 10%. with that price move, if you
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measure it peak to trough, we retraced more than halfway back to the peak in early march, so keep an eye on that. goldman sachs out with some new forecasts, as far as iron ore is concerned, $112. they are cutting their price target. copper at the 8000 level. looking a bit oversold in terms of downside momentum as far as price is concerned. let's stay in commodities and have a look at morning calls right now. belle is here to take us through latest thinking. let's bring china in here. may no longer be the driver of where prices had from here, according to who? annabelle: capital economics is who is saying that. because we have seen china accounting for half of demand for industrial metals. we have seen a typically cozy relationship where where we see the csi 300 and the s&p metals
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index. you can see that divergence that started around the midpoint of last year and that was a period really rare we had china continuing to see lockdowns, but then in the industrial metals space we were seeing gains around 20%. capital economics are looking at the reasons why this could be the case. they are saying one reason perhaps is the metal prices have become unchained from where we see the economy going from here. so as i said, a lot of the weakness that we are seeing -- or the strength in commodities prices driven by concerns around supply disruptions and supply-side factors, including the war in ukraine. also a factor weighing on the prices is we have not seen any big fiscal stimulus support from china. the other reason they are pointing to is china's stock market does not always reflect the state of the economy either, because a lot of the investor concerns have seen around the china stock markets has been
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more related to the regulatory environment. as where we go from here, capital economics is saying we should see stock market, including china's, weigh down to thee dn -- the end of the year whereas metals should do better. haidi: we have been hearing a lot from bill recently, talking about unanchored inflation expectations. he is now urging for the fed to squash inflation at whatever cost. annabelle: that's right. he just put out a really long tweet thread about one hour ago. there's a lot to unpack here. one of the ones i wanted to talk about is what happens with the fed specifically, backing this call from jerome powell to kill inflation at all costs. the reason for that is it is better for longer-term bonds and longer-term financial assets like equities. but also because he says inflation is something that has become embedded. not something we just talk about
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on shows like this, but also talking around dinner tables as well. so where does the fed need to go from here to get rid of what he says is embedded inflation, is they will have to hike rates to % by around next year-- to 5% by around next year. david: i'm looking at the tweet. quite a thread. almost a book. annabelle there with your morning calls. i was not checking my messages, just to be more specific. plenty more coming up. stay with us. this is bloomberg. ♪
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david: welcome back to the show. if you're just joining us, we are looking at a story out of could it -- out of credit suisse. just to take a step back, looking at the number of employees here, not sure how clearly you see that. about 51,000 as of the first quarter, globally. as you can see, just about every single year, or every single quarter going back to 2018, it has increased with the reception of the one red bar. but this takes is not so much on an aggregate figure, these job cuts in the region he found out about. -- we found out about.
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haidi: we are talking about the great resignation as well, there seems to be a big overhaul on both sides, particularly when it comes to talent at least top investment banks. of course it puts a lot more pressure on credit suisse, trying to turn around. we know the disaster that was archegos on top of the exodus of talent that followed as well. we know when it comes to the business here in asia, we have seen a pullback when it comes to clients in its asian business. part of the cuts were about 10 client-facing bankers in the china investment banking business. but on the other hand we saw a pretty strong performance out of wealth, so as such we did not see wealth management being is affected by these latest rounds of cuts. let's get you a quick check of the headlines. tesla is ramping up hiring in singapore weeks after it let go of the city state's country manager, part of a bigger round of jump cuts announced by jan musk.
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-- by elon musk. bloomberg is being told airbus delivered about 55 jets in june, leaving it only to fits towards his goal. they have handed over fewer than 300 planes this year against a 12 month target of 720. supply chain issues on raw material shortages are holding back deliveries. they have ordered to stop operations at one of the world's largest untapped iron ore deposits after the company's failed to reach a deal to codevelop the project. the west nation had earlier given rio and its chinese partner until june 19 to create a joint venture before extending the deadline. david: speaking of deadlines, this one is coming up next couple of minutes. inflation numbers, i don't want
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to say leading the docket, as far as what is coming out ahead. the big one is the rba, but equally important as far as the b.o.k. is concerned, and the debate on if we get a big rate hike out of south korea. 5.9% is the estimate. haidi: that is it for daybreak australian. a lot more to come, including taking a look at where the aba goes next. we are expecting our first back to back 50 basis point moving today's meeting, the first on record for the reserve bank of australia. this, as we look to getting potentially close to, or even potentially over neutral by the end of the year. this is bloomberg. ♪
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