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tv   Bloomberg Markets Asia  Bloomberg  September 4, 2022 10:00pm-12:00am EDT

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asia. yvonne: european futures are slumping, the worsening energy crisis is adding to concerns about the global economy. surging power costs, interventions. goldman sachs morning of. today is not an ethic story. but, what is going on in energy. david: the news of additional steps the european energy ministers are talking about. emergency list of measures.
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it's playing out. equity markets is leading to risk aversion. currency markets, dollar strength story. chinese markets are weaker. the 120 day correlation between the chinese currency and broader market sounds like a random number, that is above the five-year average. where that goes, the rest of them go. trade numbers are coming through out of china. in commodity markets, oil is 3.8% to the upside.
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yvonne: stock futures is where the pain is. we're not just dealing with a new prime minister, we're dealing with a follow. stocks, the next one to watch is the floor it back in august. here is more the we have been hearing. >> it's a surprise. david: on top of germany
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potential price caps on russian gas, we need to hedge some of the pricing we are getting. that's going to affect the transmission of how much you buy russian gas four. yvonne: how effective is the price cap? let's bring in kathleen hays. how badly do you think the energy crisis will impact europe
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which was already fighting inflation and recession risks? kathleen: they rise greatly. it's going to ripple through the entire economy. would you like to be the prime minister, they were already facing surging inflation. they will debate the emergency steps this friday. energy ministers. germany announced a cost-of-living crisis. it's going to hit households so hard. that's a key step to try and cushion this, the euro, down to
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99.04. this is something that will make that worse. that can feed into the inflation and make it worse. this was a topic of conversation at jackson hole. we heard hawkish comments from the ecb governing board. the bank of france. have to be more aggressive. how do you make that decision when you are staring down the barrel of what could be contractionary forces? that's the question now. it's too early to tell. would russia, gazprom shut down the pipeline to open it back up again? suddenly, that possibility is a
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harsh reality. the story is as unwinding they have a few days to think about the message they need and want to send. david: 75 basis points is the expectation. it might be different questions. should they, can they and what they? kathleen: having bid at jackson hole, to meet officials are speaking hawkish sleep. they are spending -- one watcher said they are talking this way, they have talked aggressive in the past. i don't think it's taken the cake. at this point, another argument is maybe they need to go ahead
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and find inflation over 9% year-over-year, you can see market expectations are very aggressive. if they're going to do anything like that they have to do it now. maybe this thing will square up. nobody knows. it's going to affect the economy, all of that in the meantime. the idea is get it done now, get that big aggressive hike in and see what happens next. at this part, anyone can assume it is taken the cake. yvonne: it's a coin toss. not just the ecb. plenty of events. opec-plus, have gas prices can impact how they are thinking. the rba decision, china,
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inflation, busy. david: very busy. 75 elsewhere. a smaller one, the rba, malaysia, poland. in the meantime, rate strategist. short-term targets, where you think we need to go and mark >> good chance they reacted as decision. we are not had time to fully
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digested. some say 97, some say 95. goldman said 97. it is certainly feasible. the key thing is, how does the ecb react to it? besides to 50, even if it does 75, we reduce the size of rates going forward very quickly. anything in the range is very plausible. yvonne: hold on a second. we're going to talk about liftoff. spacex. a falcon nine rocket carrying
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satellites this evening. basically we are seeing nine minutes after the launch the booster is going to separate from the first stage and land in the atlantic ocean. musk has been tweeting about these rocket launches. they have been carrying one every five days. david: here we go. five seconds to launch. it's david: there we go.
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that was the falcon nine launch. starling satellites into low orbit. flip maneuver, big split. entry burn. our dynamic guidance. very fancy. i am reading off a website. that should be part of the dollar. yvonne: that is what i was going to say. elon musk has been talking about the falcon team making excellent progress. aiming for 60 launches this year. they're getting easily into the
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target. the dollar moves we have seen, what should we watch out for this week beyond the euro? >> goes back to dollar strength. so does that you want. even though it is stronger-than-expected, it continues to hedge lower. whether asian currencies will follow, remember, it's a big export market, they don't want exports to become as competitive area everyone has eyes on who wins the prime minister election. what policies do they enact, to they add to the budget? if they do, you may see starling against the dollar.
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david: our ethics and rate strategist. we will get to e.m. later on. let's take you back to low-earth orbit. we are at the main engine cut off, live pictures. there we go. we will bring you the landing. later on. yvonne: so many metaphors. let's get to vonnie quinn. >> the woman said to be named the uk's next prime minister is promising action to tackle energy supply problems. conservative party members are expected to name her as the leader. with plans to slash taxes, they
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are alarming investors. voters and chili have rejected a new constitution that would have prioritized social rights and the environment. with half of ballots counted, 63% rejected the documents. supporters say it would mean greater equality, the tractor say it would hurt development. investors have been watching the outcome. authorities in china and japan are making operations for a typhoon. the strongest global storm this year. shanghai has closed a major container port while schools will be suspended monday. japan has ordered evacuations and canceled flights. it's forecast to move northward into the east china sea with maximum winds of 185 kilometers an hour. pakistan has added another city
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to areas hit. toronto ring areas north previously not affected. more than 1200 people happen killed and 33 million displaced. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. kind vonnie quinn. yvonne: still ahead, singapore's former foreign minister shares his views on singapore's future. plus, catch the exclusive with a cofounder and ceo on fintech trends in southeast asia. david: fresh uncertainty for residents and businesses in a chinese mega-city extending lockdowns, details on the fallout are just ahead. this is bloomberg. ♪
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>> china is grappling with a slowdown of some generational importance. >> the china story is contingent on policy support.
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>> there is opportunity when it comes to investing in infrastructure. >> to the extent -- >> [indiscernible] we're coming up on the congress leadership meeting. >> we can't keep rates so low. >> the greatest values going to come through. commitment to achieving these goals around emissions. david: on where they see most value in chinese markets. yvonne: back to earth. it's not landing.
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one of few dozen we have seen the last year or so. elon musk says 60 rocket launches in 2022, we will get there. the brings up this whole debate. david: had to take one step to my bed. let's give you guys an update at what is happening in china. lockdowns got extended a couple of more days. stephen engle has the latest in what is happening. stephen: we are having flareups across china. you have to wonder how far regions will implement the covid zero policies and see lockdowns.
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chengdu is having the central business district area having the lockdown extended for at least another three days. jen jen is having increased cases. 89 new cases on saturday as there was a run on supermarket store shelves and goods, little bit of a panic they would be a second lockdown. the previous one lasted a week. you never know. 10 of 17 districts are in some sort of restrictions. then others are in a four-day lockdown. it is in lockdown. new twentysomething cases as well. we're getting ahead of ourselves.
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it is more dampening, potentially on growth. yvonne: then you had the weather. you have a supertype in the coastal use. strephen: it is starting along shipping lanes. it's not going to make landfall, but near a big export driven province to the west and southwest of shanghai. shanghai is seeing disruptions, i believe they are closing some container operations. it's going to keep going up north. it's heading right for south korea as well. i believe he saw some headlines that the powerplant will be limiting some of the output. david: the nuclear reactor,
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south korea limiting the run rates. this is a strong storm. yvonne: strongest of the year. we saw it in taiwan as well. stephen engle, joining us for the latest. we have plenty more ahead. this is bloomberg. ♪ and it's easier than ever to■ get your projects done right.
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yvonne: here are your latest business flash headlines. india has searched premises of online payment companies. the search was prompted by allegations of extortion and harassment. australia will investigate the
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use of personal data. they said apps pose a security challenge. the report is due by next year. rising interest rates continue to weigh on demand in the housing sector. our source says fewer than 100 positions have been eliminated. 15% down compared to one year ago. david: the big market stories are contracts in european equities. lest we checked we were down about 3%. the energy crisis, we're back below 3% on the stoxx 50 contract. trading closer to $.99 on euro-dollar. it's going to be a big week. not even mentioning the ecb just yet.
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yvonne: that is on friday, right? there is a lot to look ahead too. in the meantime, we are digesting this news. take a look at the big gas players, they are rallying on the back of this crisis. where are watching the reopening stocks, the ev story as well from berkshire hathaway. ne-yo is dropping similar measures. coming up, singapore's former foreign minister is sharing his views on china, ossian and the u.s.. this is bloomberg. pst. girl. you can do better. at least with your big-name wireless carrier. with xfinity mobile you can get unlimited for $30 per month on the nation's most reliable 5g network. they can even save you hundreds a year on your wireless bill over t-mobile, at&t, and verizon. wow. i can do better! yes you can! i can do better, too! now you really can do better! switch to the fastest mobile service - xfinity mobile.
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>> is almost 10:30 in hong kong and singapore, so we are rushing
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into the lunch break over in tokyo, the march gets -- the markets are there and the state of play is not good. we are not at two year lows at the asian benchmark. we have singapore pulling down today. the dollar-yen should be at about 140, flexing its muscles going into central bank week. yvonne: we get more of the euro rather than the dollar strength story. we see what we get with gazprom over the weekend. the bank of thailand governor is speaking this hour and he is talking more about inflation. it may be high in september and october and inflation expectations in the long-term are still in target. inflation may return to below 3% by the middle of next year. high inflation is not as worrisome as in some other nations, so dovish comments
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coming from there. david: we are going to get it intraday and europe is at about 10%. this goes into where you have all the commodity prices. have a look at where we are in brent, and other nat gas. we have some special measures ahead of that to rein in these energy costs. maybe gas price caps and also may be some tweaks to derivatives trading in the power market. let's throw in the kitchen sink, kind of energy crisis. yvonne: let's bring in andrew james. what are we expecting from the eu? andrew: as david was mentioning, a bunch of things are being considered. they're looking at capping the
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price of natural gas and also looking at a price ceiling on natural gas from russia, restricting derivatives trading. and also critically, they are looking at creative lines to support utility and the market participants. trying to avoid some sort of lehman moment where you get the impacts from the spring across the financial sector. germany has already come out with a $65 billion package to protect consumers from some of the impacts of the energy crisis and scandinavia has moved to support liquidity for direct utilities. david: opec+ has a meeting later today. what can they do with their oil markets and their supply here? andrew: they could do it.
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it might affect them through the now potentially recession in europe and it was looking more comfortable, this energy crisis, so that may have fixed the demand calculations they are making. most people are expecting opec+ to not suggest supply, although the saudi energy minister came out a few weeks ago saying that there is any need to potentially restrict supply. there is some sort of restriction that is not out of the question. we have also had the fresh lockdowns in china, chengdu and other cities which will be fading into the capitulation. you may not want to inflame relations with the uae at this time by restricting supply, so it will be interesting to see what will happen. yvonne: thank you, andrew, on what is at stake with energy
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prices. let's get more from the geopolitics side of things and europe's worsening energy crisis with george yeo. he is singapore's former foreign minister and he just released a new book discussing philosophy and politics. thank you so much for joining us. it is clear to see where the leverage still lies when it comes to the energy crisis and russia seems to be taking charge right now in the dynamics. how do you see this escalating? george: the ukraine war is being fought on two levels. underground, we are talking about energy, but it is this larger hybrid war between the west and russia. i think european leaders are feeling nervous now even though they come off as confident, but deep down, they are unsure if
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the current positions can hold. david: i want to draw on your experience. this used to be her playground and this is a situation -- your playground, and this is a situation where a lot could happen. with a lot of your political relationships, when in reality the economic ties are much deeper than politics. george: i think we have to take a longer view of europe. russia will always be there. it is almost inevitable now of how demand will be drawn. it is unlikely that there will be a movement any time in simply because it is not possible for the west. there is a rush of demand and
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russia will not pullback. we have a situation similar to the korean peninsula of cyprus where you have powerlines, but no agreement on this issue can go on for decades. yvonne: how do you think the chinese are looking at the situation right now in ukraine? what are notes that you think they are taking on what could happen when it comes to the issue of taiwan and whether it escalates further tensions there? george: i think the chinese are sitting and monitoring the position very carefully. at the same time not condoning the invasion.
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russian oil and gas are much cheaper now and china is playing a careful balancing game. they also take away the heat from china because russia is now the focus of western strategic thinking, it has no more energy left to dedicate to china. however, this is a separate issue. there are some that think taiwan is a card to be played. we do not realize how serious this game is. anyone who knows the history of taiwan and how it was taken away from china by japan, how it was promised back to china, you know how deep the issue is. if there is conflict over taiwan , let us say that china loses
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the battle. it will evoke in the chinese buddy politics reaction as profound as in the u.s. after pearl harbor. it is that serious. and people who do not know the history do not realize the significance. david: and you have to draw on the history -- strong is an understatement on how china and chinese leaders look at what has happened in history to inform of how strong they have to be in the future. it is an important political year, october 16 being the party congress. how do you think the rest of asia needs to align with a moment of permanence in terms of china and the u.s. in trying to increase relations in the form of taiwan and trying to increase the influence of how they find the balance between asian
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countries? george: right now, it is a tense china because of the coming party congress. i hope xi jinping and modi will meet to solve immediate issues. things could turn for the better after the summit, or it could turn for the worse. we are in a tense period, and once the party congress is over, these issues will pick up. but china's rise in asia is a given. after nancy pelosi's visit in taiwan, not a single person in
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the singapore region was happy about it. this was a u.s. issue either to promote -- provoke china or bait china. they do not realize that it enforces a choice. everyone wants certification. yvonne: i want to get to your point about -- could you tell us the cliff notes version of it? what is going to be the big takeaway? george: the third series in my book covers china and india and discusses the deep nature. it is important to understand china's deep nature because china is a country that cannot escape its own history.
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they are homogeneous and they have been for so long. they want china to be mostly chinese. they like that. and today, they have the most incredible warhol, which is the biological war of china. this is their mentality and it will not change. it will take time for the west to understand's -- understand china's nature. david: thank you so much. singapore's former minister of foreign affairs. we will speak exclusively with someone who also has some experience in foreign relations.
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that will be later on in the show. yvonne: that's get the first word news with vonnie quinn. >> china has extended its lockdown in chengdu to try to contain its latest covid outbreak. they will further intensify lockdowns and extend control measures for three days. at least two other parts of china are also under lockdown. nationwide, more than 1500 cases were reported on sunday. the air to one of india's most largest fortunes has died in a crash. the -- he was the chairman of the crowder fund from 2012 to
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2013. the price of the most commonly used gasoline is increasing by more than 30%. president joko widodo says state funds must be used widely, with most of the supply going to people who use cars. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. yvonne: covering up our exclusive conversation with you technologies' ceo caecilia chu. that will be coming up next. this is bloomberg. ♪
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yvonne: let's take a look at your southeast asia assets and we are looking closely at what we hear from the bank of italian governors saying that the bonds are weakening due to u.s. dollar strength. the tourist sector there is booming once again, so we look to that weakness despite that. we take a look across and everything is weaker today with
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the dollar once again stronger. we even have the weaker rendering be and how we continue to see more pain with the lockdowns. david: how high down we are with the yuan. when it comes to southeast asia too, the outlook for malaysia has been standing out in a good way. so far this year, you look at equity markets and they have outperformed on global equities, or have performed slightly less bad. we have a reopening of the region that is bringing a slew of tourists as well. that helped shielded from the global stock track. let's talk more about what is going on underground and joining us now is caecilia chu, ceo and cofounder of you technologies. very nice to see you and i hope you got a restful weekend.
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we were talking about southeast asia is down at least for investors. what are you seeing on the ground? caecilia: this is an exciting time right now. ever since reopening, we have done well in q1 this year, and we are seeing there is a strong effect when it comes to general activities and general consumer confidence. people are happy and they are coming out of their homes again. i would say from a business standpoint, the impact is significant. the volume on the platform has gone up three times from the end of the year. it is that strong tailwind going into the next few quarters because a few things overall have not gone back up to pre-covered levels just yet. we see that not only as -- pre-covid levels just yet.
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to us, that is a clear indication of more intense problems. david: -- more trends to travel. david: do you see this moving into all of where people will go to where they are? caecilia: that is a great question. the operating of a payment paste -- based platform, we have seen pockets of people feeling more comfortable to book their trips. they are traveling in the nearby regions, and we see people want to take advantage of the cheaper euro and there are long-held flights to europe and the u.s.
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we expect more trips coming up in the second half this year as well. yvonne: we started talking about inflation, which is a big topic. are you concerned that higher inflation will impact consumer spending? what is your take on that? caecilia: that is top of mind for us as a business as we do track demand growth economies and also the interest rate environment closely. because we do have greater eyes on what is happening, both in terms of spending volume per individual and the sign-up rate, we are seeing no signs of a slowdown or a recession just yet. i would say it is varied because over the past few years, people were primarily at home, and now that orders are reopened and more countries coming online, we see this potential pathway there.
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david: how are you aligning your business priorities for the rest of this year and next year? tell us what you are excited about. caecilia: right now, we are excited about the markets and also excited about our product. from the market perspective, we think that the asia region is an inflection point. we see good tailwinds from a business fundamental standpoint, and what we're focused on is that post-pandemic opportunity for the next 12 months. from a product perspective, we were much more reliant on travel before the pandemic, but throughout these last few years we have broadened and diversified our product in our portfolios. we are excited about the new product in the region and we are
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going to keep growth trouble for the next coming months and quarters. david: tell us a bit more. what does this new product mean? caecilia: we have been operating youtrip for four years now, and it includes a number of other bells and whistles for payments. now we have a good penetration into the market. one in five millennials in singapore are current users and that number is growing fast. in may, we just launched our new sme product, and it is our own take on a hole in one financial operating system for the sme's because it is powered by our own technologies. as a business, when you sign up, you get an exchange rate for
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your business, but it is also easy to have a fund management platform. that is what we do for issuing cards to yourselves and employees as well. we see great traction. we have more than 1000 sme's. where one of the fastest-growing sme businesses in the market, so we are excited about that. david: great to speak with you. caecilia chu from youtrip. there is plenty more here on our program. this is bloomberg. ♪
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yvonne: we have a bit of headroom now. [laughter] david: and there is more there. we take a shot at these markets and we still come back in a little bit. we are 3% down and this will continue to be an offset and europe is more front and center. yvonne: natural gas futures continue to be elevated this morning. take a look at the gmm with global macro movers and the dollar strength is on the top value. it is a blaring red across the
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asia ethics. renminbi is -- asia fx. bonds have gone up as well. and we are getting lines from her interview with john kerry talking about u.s. climate talks that have been suspended with china, but their hopes are that talks will resume. david: there is plenty more on that and your top market stories. we have china and a lot more in between. this is bloomberg. ♪
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>> welcome to "bloomberg markets: asia."
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i am juliette saly. yvonne: and i am yvonne man. asian stocks are under pressure and the eu's worsening energy crisis is adding to concerns about the global economy. considering emergency intervention and competing this week's ecb decision. plus we hear exclusively from u.s. envoy john kerry is an engaging china in the fight against global warming. jules, he is still hopeful that the talks between the u.s. and china after they were brought to a halt after nancy pelosi visited taiwan, but everyone is talking about how this war in ukraine is overshadowing the climate crisis around the world. juliette: indeed. john kerry saying that the war in ukraine is taking attention away from the climate crisis and talking about the fact that in
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order to get to the broader talks to resume, he is hopeful that they will resume. we will get more on that exclusive interview with haslinda in hanoi shortly. let's talk about the energy classes weighing into sentiment here. we see the regional benchmark index coming at a two year low. investors are weighing the risk. we have stronger-than-expected pix from the pboc in terms of yuan re-friends -- reference. we see some currency led by the yuan as well as we see this strong dollar bid, and no retrading because of the labor daybreak in the u.s., but we do see the rba moving ahead of the meeting tomorrow. yvonne: it could be a painful session in europe when they wake up in the morning.
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futures there, you take a look at 3% when it comes to equity futures in europe. we continue to see the downside across europe and what our emergency measures. bloomberg has reported that it does not move the needle in terms of reining in these crazy energy bills you could be facing in the winter. a lot of potential setback and what the fallout will be like. juliette: absolutely. let's discuss more on the energy crisis in europe. and the ecb prepares to meet later this week. we have kathleen hays with us in new york and andrew jane's with us in singapore. what do you see from the energy market? andrew: there are looking at five different main things at the moment. they are looking at capping gas and electricity, they are
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looking at a price ceiling on russian gas imports. we see deliberative -- derivatives trading and this might move into the electricity market to cap prices there. and the most crucial, they are looking at a europe that has a creative line of support for utility and energy traders, and other market participants. they are trying to avoid a lehman like moment where you get a read across the financial markets. that is on top of germany which has improved -- approved a $55 billion plan to support consumers and they have indicated they are looking into liquidity support for utilities. yvonne: and kathleen, you talk about how it seems like we are one step closer to recession in europe given what we have seen
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over the weekend and inflation continues to be elevated. are we talking more of a stagflation scenario for the ecb to contend with? kathleen: the problem is that the risk of recession rises at a time when their consumer price index is up over 9% year-over-year. how does that make you feel? you know you have this problem that could hit your economy hard, yet you know you have to do this job. the euro has come under pressure and it hit parity. now it is hitting it again, and these are things they have to contend with. andrew just talked about the quick and steamy monetary measures. let's do something and put money into people's pockets so their households do not get completely crushed. their problem is that it is mostly unknown on how this will affect the economy. how will this happen if germany, italy, and others are on the
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natural gas from russia? our guest was with us earlier talking about the complications and how hard it is to gauge what is happening. >> we just don't have the intelligence on how well you can prepare for this. we see the data and the forward cost and megawatt hours. we see the storage data, but nobody has come up with how tough things are going to get. one of the risks is to the downside and that. >> there is one argument that the ecb will hike as fast as they can before they get into a real recession. they have a couple of days to think over this, but they are not sure whether this is going to happen. they were opening the door to a 75 basis point rate hike in the ecb. juliette: also we are getting more lines coming through from haslinda's interview with john kerry.
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we have been mentioning the implications from the ecb and the question is what size hike they will get? kathleen: if you are the ecb, do you want to take that big step? 75 basis points have not been for a long time and this is a market that was pricing in an aggressive move. i would suggest that even though out of jackson hole, the head of the bank of france said they had to act aggressively to not get inflation entrenched. you have to wonder if there might be more of a move -- i had interviewed olli rehn, the central bank governor of finland, and he too kept the door open, but he did not know if he would go through pit he was talking about energy dependence and what that would mean for the economy.
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i think everybody should realize they're going to wait until they are in a clear place going into this meeting with nord stream being shut down for maintenance and it is something that makes that decision all the harder. yvonne: and andrew, when it comes to central banks, they all seem to be hiking rates. but for opec+, it is either a cut or a hold today. how does the whole gas story impact them? andrew: the european gas story will impact opec+ in a couple of ways. it is likely to increase demand for oil products like diesel or fuel oil which can be used for electricity generation. more importantly, it is on a macroeconomic move making the possibility of a severity of the european recession more likely, which will move into the demand calculations. most people are expecting the
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alliance to keep production steady, but there is a chance they do restrict output given what the saudi energy minister said a couple of weeks ago about the market being broken and he spoke about the possibility to cap it. we also have a recent news sector that has the revival of the virus lockdowns in china, which will affect demand here. generally, people are expecting no change and possibly re-add will not want to inflame relations with the eu by capping output. juliette: thank you. let's get the first word news now and china has extended its lockdown in chengdu, ordering more testing to try to contain its latest covid outbreak. they will further intensify lockdowns and extend control measures for three days.
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chengdu's lockdown started on thursday. at least two other parts of china are also under lockdown. nationwide, more than 1500 cases were reported this sunday, 140 of them in chengdu. 10 and japan are making preparations for typhoon hin nanmor. several coastal cities will have activities suspended on monday. hinnamnor is expected to have maximum winds at 185 miles per hour. pakistan has added another six districts to being hit by torrential rains, causing flash flooding. more than 1200 people have been killed and 33 million displaced after the highest rainfall in three decades.
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the candidate anticipated to be the next prime minister is tackling the energy problem. liz truss promises to tackle the energy supply, but we have borrowing costs rising faster than any other markets. those are your first word headlines. yvonne: still ahead, dvara research says that the banking industry is facing an industry innovation disruption. first, we talk about the earnings this year with vikas pershad from m&g investments. we discussed their investment strategies next. this is bloomberg. ♪
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juliette: you are watching "bloomberg markets: asia." i am standing in for haslinda is in hanoi, currently speaking to u.s. climate envoy john kerry. there talking about the energy crisis in europe and the implications there, saying that selling natural gas might be necessary to support the worsening energy crisis. yvonne: that war in ukraine is bringing a lot of attention away from climate change. here's more on that conversation with john kerry. >> they didn't say they would
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spend, and that means it could open. at a given time, i hope it is with president xi who will recognize the deficit of getting both of us -- the benefit of getting both of us moving in the same direction. juliette: let's get more now on the market action with vikas pershad, fund manager at m&g investments. how much could the energy crisis, kate the global market this point -- how much could the energy crisis complicate the global market at this point? vikas: the price of energy rising, valuations having gone up a bit, it is hard to be as constrictive. on top of what could be happening with the earnings season for the december quarter,
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we have elections undermined. we have a lot of excitement still in our pocket. we have cash higher. juliette: when we look at the europe gas story, we are looking at the euro below parity. what are you looking at? vikas: we are focused on equities, but i do think the broader equity markets have a change in our view. we have q1 of this year where we weathered some storms we could not have seen. we can see there are chances ahead. yvonne: you mentioned building cash and being cash positive in this environment. what signals are you looking at to start the point that we look at power once again? vikas: we are not chomping at the bit to deploy cash right
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now. when you couple that equities with the valuations, since then, every broader market in asia is higher. you couple that with the outlook , and we are waiting. yvonne: you mentioned the hsi benchmarks in the mainland that underperformed. i wonder if there are diversions seen between northeast and southeast asia. has it become an equity -- i haven equity was? -- a haven equity wise? vikas: markets are not one-dimensional. they are two-dimensional or three-dimensional, so we have what markets are valid or whether they are flagged.
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relatively, the earnings picture is clearer in south asia where the multiples are higher in those markets and there is risk from geopolitical tensions as well. juliette: and that goes into your view on these economies, what are you looking at about the china story how investors will value this? vikas: it will be late 2020 and we have maintained the view that china is investable. people have allocated time and money to that market, but the hurdles are higher. the risk to invest in japan or india are less than china. juliette: the decline in the yuan not helping today as we see dollar strength. are we worried that the strength is in the dollar are implications to what we see in the future? vikas: all of these are similar but also different.
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if you look at currencies in isolation, it is a different picture when you look at it against the dollar. what is going on with energy markets and the strength of the dollar will have an impact. juliette: vikas pershad from m&g investments here with us in the singapore studio. let's get straight to hanoi now where haslinda is wrapping up her exclusive interview with john kerry. he is also the former secretary of state of the u.s. have talked a lot of headlines as we were speaking to mr. kerr y, but what was the big take overall? haslinda: the key takeaway is that he is hopeful to continue to have talks between the u.s. and china will resume soon enough. we are talking about the u.s. and china, the two largest economies and the two largest
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polluters in the world. it is essential that the two keep talking to ensure that everybody is on board. they are concerned that with the u.s. and china not talking to each other, other countries macy's the opportunity to do nothing about the commitment -- other countries may see the opportunity to do nothing about the commitment to tackle climate. take a listen to what he had to say. >> to get the two largest em itters in the world talking to each other, working together, because that will help shape the response of other countries around the planet. i am hopeful and i remain hopeful. they did say they would suspend. that means it could open at any given time. i hope mr. president xi will
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recognize the benefit of getting both of us moving in the same direction. the world needs a positive mission -- message. haslinda: how bad could it potentially be? >> fuel, gas, oil has been weaponized by president putin. the war and obviously people go to extremes because of these things, but it is vital that we not lose so many lessons that have been talked -- talked to us again and again in the post world war structure that we try to avoid collateral damage. haslinda: that was john kerry there pretty he said about putin
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weaponizing climate. juliette: sorry, i spoke over you there. please continue. haslinda: [laughter] i was just saying that kerry was talking about how putin was weaponizing energy. this is on the back of the energy crisis we see in europe and we see how gazprom has suspended the nord stream pipeline and they talked about how and energy catastrophe could come. he is helping the situation could be resolved too. juliette: and important commentary you had on the war in ukraine, on the european energy crisis. what else did you discuss with john kerry in terms of the overall threat to the global economy? haslinda: i did ask him about
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the energy crisis in europe and whether the u.s. was doing the right thing in providing fossil fuel exports fill the gaps that europe is expensing right now. he said there is no choice. as long as the net goal is zero, in the process, using gas in the meantime is a right decision. he says the u.s. is willing to export fossil fuels at a time that it is encouraging the rest of the world cut their investment in fossil fuel" -- in fossil fuel and coal, so that is what it breaks down to. yvonne: haslinda amin, our bloomberg markets coanchor with that interview.
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cop27 ob happening soon. -- will be happening in we will speak more about how climate change will go through. this is bloomberg. ♪
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yvonne: dollar stronger and yen weaker. we continue to watch goes on with the greenback this money. that's check on the latest flash headlines. india's anti-money laundering agency has looked at razor pay as part of the investigation into a chinese loan app. the search was prompted by allegations that -- the agency
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is cooperating with the investigation. australia is reviewing data use of tiktok and wechat pay did a report is due by next year. the government also announced a review of social media compensation, including facebook and twitter. citigroup has joined rivals in cutting mortgage staffers. fewer than 100 positions have been eliminated. their mortgages for this year was down 15% compared to a year ago. juliette: and europe's energy crisis is worsening. see an upside coming through in asian energy and coal rising amid the energy crunch. you see gains across the region of what we see from the likes of
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australia coal and they are harvesting as much as 6.3%. in the ev space, we had warren buffett's berkshire hathaway taking a stake in chinese automaker be ig. yvonne: that continues to shape the sector there. the reopening sector in china is a story. we have more with the u.s. climate envoy john kerry talking about a this is xfinity rewards. our way of showing our appreciation. with rewards of all shapes and sizes. [ cheers ] are we actually going? yes!! and once in a lifetime moments. two tickets to nascar! yes! find rewards like these
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yvonne: it is a rainy monday morning in shanghai this morning. take a look at where markets are there. pretty much flat, which is better than the rest of the
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region, but still a lot of concerns about chengdu and we continue to see the dollar strength. continued weakness in the renminbi despite strength from the pboc trying to slow down the clients. we just hit 4000, the psychological line for the large-cap this morning and hong kong is under a lot of pain this morning. juliette: broadly speaking, we have been on watch for the regional benchmark index hitting that two year low, and that has happened after that broad risk off session. china is under pressure and hong kong, a lot of those big tech players are coming under pressure too. we did see the upside from coal and gas plans, so the asx 200 has a slight gain there. yvonne: let's get you your first
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word news now. eu ministers are set to discuss measures to rein in the energy costs. they consider at a meeting of energy ministers on friday. gazprom's decision to keep the nord stream pipeline shut is bringing new urgency to europe. indonesia has raised fuel costs to ease the burden of a government energy subsidy budget. the price of the most commonly used gasoline is increasing by more than 30%. president joko widodo says state funds must be used widely, with most of the subsidies going to people who own cars. voters in chile have rejected a constitution that prioritizes social rights and the environment. almost 53% rejected the proposed document.
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investors have been closely watching the outcome in one of latin america's richest nations. cyrus mistry, the heir to one of india's most largest fortunes , has died in a crash. he was the chairman of the crowder fund from 2012 to 2013. those are your first word headlines. juliette: u.s. climate envoy john kerry says that the russian president has weaponized fuel. he says the war is taking attention away from the global energy crisis. the former secretary of state also talked about the climate talks with china against global warming. >> i remain hopeful.
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they did say they would suspend. that being said, it would open at any given time. i hope that president xi will recognize the benefit of getting both of us moving in the same direction. the world needs a positive missive -- message. juliette: let's bring in allie. -- >> in the run-up to cop26 and glasgow, -- came out of retirement to address john kerry and the two had a last-minute meeting in glasgow, which field
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the momentum and resulted in a glasgow packed. tensions have been more challenging, as the secretary mentioned, but the door remains open. the initial projects in methane reduction plans, there is still opportunity to see progress on that. yvonne: as we go back to hanoi and speak with has now, we continue the conversation with john kerry, and you mentioned how hopeful he was with resuming talks with china on climate change. haslinda: that is right. in the background, kerry has been the one that has insisted that climate talks have been more of the issue plaguing china relations. here we are, two months until
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cop26 work -- where the biggest powers in the world are speaking to each other there. there lies a huge challenge in the lead up to this meeting. he suggested he is optimistic. whether that happens or not remains to be seen. here's what he had to say in that interview. >> how long do think this energy crisis will hold off? one belgian minister estimated that europe could see 10 difficult winters. >> for me are anybody -- it is difficult for me or anybody to predict. it requires responsible leadership. doing everything in our power to bring people to the table and find peace, find an alternative way to resolve issues.
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there are things that could be talked about and resolved here. but they also have to be right in the context of strategy and foreign policy. haslinda: we see germany investing in gas facilities right now. >> they are, but here's the way we look at it. there will be gas and oil pumped through for some period of time no matter what. that is cooked into the rate at which people are now saying we will reduce our emissions. net zero by 2050. to get to net zero by 2050, which is a universal goal now, we need to reduce, according to the scientists, we must reduce emissions by at least 45% between now and 2030. you can do that, but you need
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gas in some degree as it replaces coal and oil. gas is 50% less polluting, so for a period of time, we use gas in place of coal, that is again, a reduction in emissions. but after you reach 2030, in order to get to net zero by 2050, you must be reducing the emissions from the gas. and it is only 50% less, not 100%, so it still has missions coup problems. president -- it still has emissions problems. president biden understands this. it must be transitional in capturing all of the emissions. replenishing some of what we needed to keep europe and its economy humming or keep homes heated, that will be necessary in the short-term transition.
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but nobody should be fooled into thinking, because of ukraine, we just forget about dealing with the climate crisis. no. you cannot forget about that crisis. it has to be dealt with simultaneously. haslinda: kerry said that fighting climate change should be like fighting a war and everybody needs to be on board. as of now, the different countries are in different states and have different commitment levels. he is urging for more to be done. yvonne: haslinda amin joining us from hanoi. we will bring back ali to talk about the energy crisis and the need for cooperation between the u.s. and china. how will that corporation alleviate the problems in europe -- cooperation alleviate the problems in europe? >> we have the crisis in europe
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caused by russia, so the reason we have higher coal and gas prices is because european countries are looking for alternative supplies that they were getting from russia as a result of that, gobbling up energy contrasts. -- contract. this raises all of the energy prices around the world higher. trainer can help the u.s. to put pressure on russia -- china can help the u.s. to put pressure on russia and that will help. that happen? -- will that happen? it remains to be seen. china has become one of the top buyers of u.s. energy exports. if the chinese energy consumers are willing to give some of their reserves to europe, that could help.
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overnight, this will be difficult to result and it will take time. juliette: you have done a lot of research about climate change litigation as well. when you look at the u.s. and china, who was doing the most to extend the most here? >> if you look at the emissions reduction over the last decade, even the u.s. emissions declined. on the other hand, on a per capita basis, china's emissions are still lower than most other countries, and china has built up the largest supply for renewable transition. it is the biggest market for solar, wind, and also living smarter for nuclear power. china is doing a lot even though it's emissions are still rising. yvonne: great to get your
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intake. coming up, a shift in india's banking sector. we speak with deepti george next for that discussion. this is bloomberg. ♪
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juliette: welcome back. you are watching "bloomberg markets: asia." investors will be working in india today as the country will report its confidence cmi for august. the ipo will open for subscription today and sunday's figures sort at 50 500,000 -- 55,000. not met -- much changed when the open will happen in two minutes. yvonne: let's look at how the cycle is there in india as well. the company has made rapid strides when it comes to financial inclusion, but the fintech space has been facing increased regulation on e-wallet budging. we speak to deepti george, deputy executive director and
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head of strategy at dvara research. you recently spoke that the are b.i. needs to be more supportive in terms of innovations in the fintech space. what is the state of place right now? how do you find signs of improvement? deepti: there is regulations that have been happening over many years. we have a situation where the rbi indicates that a dozen more things will need to happen. the prime arrangements between fintech and the balance sheets curb realities, and when these become too high, the rbi will make moves on the balance sheet lending. i am told the latest guidelines
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that were announced as late as last friday, with or something like that will continue to be allowed. however, this does not take into consideration what has been going on throughout the year. we want an approach to doing this. yvonne: and the rbi last week had talked about trying to curb lending in the official apps and restrictions in november. how do you think this will resonate among some of the big names in that sector? deepti: the rbi will cover a lot of cost-cutting issues that have been plaguing the system. within the digital space, we have different unfair business
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practices, and the allegations will need to curb the factors, and businesses would have to be compliant -- meet compliance requirements. we can also think about focusing on -- to make sure the back of these allegations can be met. juliette: what kind of debt levels have we seen households accumulate post-covid, and could there be concerned that the debt will weigh on the fresh battle lines? deepti: i wouldn't be able to comment on that, but it is clear that outside of the digital lending space, we get a lot of businesses that check on financing, underwriting the
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credible assessments. the reporting that has been happening, we have individuals and households taking on additional debt without knowing that is what is happening to them. on that front, while they do not show up as a specific risk, but what happens within the household sector, there are certainly those values. juliette: tell us more about what you think needs to be done to foster innovation and tech adoption amongst the banking sector? deepti: there is an explicit mandate by the rbi of which additional banks can do it. the challenge becomes getting ready and this is not something you can postpone anymore.
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the ministry is bringing various dimensions and there is a body that has -- that looks at different apps. you can then focus on the actors. also, the food ministries are being brought up to various entities, so we can proactively solve all of these issues and implement this law. yvonne: deepti george, deputy executive director head of strategy at dvara research. we are seeing some upside when it comes to equities this morning and the momentum around the results for india. we also see that dollar strength. when it comes to the rupee, we
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are stable right now, but we continue to watch what is happening with the euro. we have the yields heading lower by a few basis points this morning as well. the sensex is up about 0.4%. juliette: coming up, liz truss is expected to become the next uk prime minister. details ahead. this is bloomberg. ♪
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juliette: a beautiful shot of london as it wakes up for the week. we are seeing the pound fall against the dollar. the pound dollar at 1.14. liz truss is expected to be named the prime minister on monday after a conservative party contest with rishi sunak. let's get more with stephen carroll who joins us from london. what are we expecting today? >> we will find out whether it will be liz truss or rishi sunak and it will be confirmed as the next prime minister.
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considered the front runner. the members of the conservative party have been able to vote and it is their decision that will be announced later this afternoon. is going to be an interesting change of power not only because of the huge inflation crisis that is facing the u.k. with the darkening clouds surrounding the economy, five rounds of recession starting later this year, but we also have inflation hitting double digits in the u.k. another big economic shock is on the way because we will have household energy bills rising by as much as 80% on the first of october. those will be the challenges facing liz truss or rishi sunak. we will find out who of those will be taking over as prime minister. we will get the results of the contest today, but tomorrow,
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boris johnson will leave 10 downing street for the last time. the queen is not able to come to london due to mobility issues she is experiencing at the moment. we will face that economic issues next. yvonne: the energy crisis is one priority. what about when it comes to foreign policy? stephen: the biggest issue will be related to brexit because these are the trade rules governing northern island that will be front and center for whoever takes over because there is already legal action being launched by the eu against the u.k. -- what allowed the united kingdom to override parts of the international agreement it
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signed with the eu. that is an already looming crisis. the other issue is the tightening taper from last week, reporting that if liz truss becomes prime minister, she may upgrade the position of china with -- upgrade the position of china to a threat within u.k. foreign policy. there may be more harsh realities to be faced when the outcome of this race is decided later. juliette: is liz truss popular amongst the people? stephen: that is an interesting question because the only popularity that matters to liz truss as of the conservative party because those are the ones who voted. public polling has not been good for the conservative party in general. labor has an eight point lead over the conservative party if it goes to a potential of an election, but it will not matter
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immediately for the prime minister because that is not scheduled to happen until 2024, and the last prime minister won a massive majority. the conservative party is in a stable decision -- position. what mp's got to vote in this contest, it was split evenly between three candidates at the time, so they will have to split it among their members. yvonne: thank you. that is stephen carol. take a look at what europe is waking up to. it will be ugly. a lot of futures are suggesting that. dax futures are down there .3% and the ftse is also dealing with that as well. the euro is in focus, jules. juliette: and how much further it goes below parity looking at the last 20 days. we were talking i 3% drop from
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the yen to the greenback. now it could get around 97, and that is flowing through. not only the europe story but the dollar strength in europe which is being played out across a vast number of the fx columns. yvonne: you have to wonder if 75 basis point hike from the ecb will change anything. weakness across asia fx and redman been -- renminbi at 6.94. markets middle east is next. this is bloomberg. ♪
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