the rba will not change anything. not the rate hike timing, not the 0.1% three year bond yield target, because australia is reopening its borders. that is going to mean more foreign workers coming in. and when that happens you are going to see downward pressure on wages, not upward pressure. and high energy prices will give australian consumers less money to spend on other things. these are the kind of things you're going to hold down inflation. that is why they say they are not going to move. big debate in the market, big debate among economists as well. we will see what they say. just 1.5 hours from now. yvonne: the housing market in australia is on fire. how does this factor into the debate? kathleen: it is interesting. you could kind of look at it two ways. gosh, home prices are up about 24% in australia over the past year. a lot of countries have this red hot housing market issue. that is a good reason maybe to say we do not need all this liquidity, this 0.1% key rate. we can start moving up rates. on the other h

the april 2020 four target was eight times the rba target. we will be looking for whether there is a policy shift and how they feel about that inflation number. poor headline inflation jumping back in for the first time since 2015. shery: isn't this exciting when we have central bank decisions? in the past year, nothing has changed. all of a sudden, all of these decisions are market moving. that is what we saw in singapore as well. last month they surprisingly tightened policy and we are hearing from the managing director, the chief central bank, that he is ready to act on inflation. >> we know it can't last forever. there will be adjustments needed. how long they last is hard to say. the longer they last, you have risk that some inflation becomes entrenched and expectations build. that is a big unknown and it is a risk factor. shery: we had inflation coming in above the central bank's target of 2.5%. we will have more from that conversation with the monetary authority of singapore later this hour. hear what he says about the cities ambitions

the fed, the boe and rba. we dig into risk for more vigilanteism. our guest joins us, a potential delisting from the u.k. this is bloomberg. ♪ manus: it is "daybreak: europe." a massively procedural base, the rba, the fed, boe all coming into play. the fed will announce it kick tapering probably on wednesday. the bank of england's decision with the fate of a potential rate hike according to two dividend governors and the rba faces huge pressure heading into tomorrow's policy meeting. we saw australia's worst bond rate since 1994. it is a big around -- pivoting around. hone into column three at the very top, this is the bond market repricing again. he went vigilanteism in the bond market on credit with two, 5, 10 all moving higher. i move three standard deviations back. they did not defend they'll go target of the two year paper, and how much of a mistake was that? let's ask a senior strategist. thank you for joining me, i watched the bond market on friday, the biggest move since 1994. howell fawley -- how folly was it of the rba to not allow paper

in the words of the rba, conditions may take some time. and get the have abandoned yield curve controls. how close are we to rate hikes? the markets is 175 basis points next year. -- the market says 175 basis points next year. where are you? >> nowhere close. there has been a complete overreaction to the markets in australia. throughout the conference, they stressed time and again it is all about wage growth and there is no wage growth in australia. he talked down concerns about core inflation. he is quite sanguine about the supply chain crunch story. a lot of that can be ironed out as people move from buying goods to buying services. there is a headline that they moved away from yield curve control, but recovery is well underway. they are focusing on getting wage growth. raising interest rates would be counterproductive. there will not be a rate hike until 2023 at the earliest. >> interesting you have april 2024 bonds back on the leash. it is mission impossible to get it back under control. go to tliv on the bloomberg. cop26 talks are und

i believe you have more on the rba. vonnie: the target is in the spotlight, holding a meeting tuesday. this all after it allowed the market selloff last week without taking action. some economists not expect australia's central bank to abandon the .1% target for the april 2024 bond. but bloomberg economics thinks the rba is likely to keep policy unchanged. singapore's momentary authority says the city needs to cement itself is a key player for condo currency or risk being left behind. financial centers around the world are grappling with how to handle one of the fastest-growing areas of finance. mas managing director -- told is that the best approach is strong regulations. >> we are interested in developing crypto technology, understanding blockchain, smart contracts, and preparing ourselves -- for a tokenized economy. we want to make sure we are well-positioned. vonnie: hong kong is set to end quarantine exemptions as it tightens up the strictest policies with the aim of reopening the border with china. exceptions for

what is the lesson learned on the rba having to bow to market moves? >> the lesson learned is that all of the central banks are finding themselves needing to respond to what i think for them is a very rapidly changing environment. in particular, what one sees with the rba announcement is something that has not been acknowledged by our fed in the united states. the markets getting ahead of them. in this case, the market is saying we understand how you want us to think about this, but we are going to think about it differently. the central bank is finding they have to respond. haidi: we are also starting to see a theme of stagflation. data shows the extent of how the supply shortages globally are starting to weigh into the dynamic of parse pleasures. -- price pressures. >> i have said to many people this might be an analogy that doesn't play too well in australia, stagflation is like the abominable snowman. much discussed but never seen. i don't think were going to see it here. most central bank authorities i think would agree you don't have stagflation

last week, the market tested them and rba was quiet. you have an increase in the two-year rate, a shocking magnitude. from the fed, consensus is that they will announce tapering. they need to be careful to manage market expectations. the market is already pricing in rate hikes. with the boe this week, the expectation seems to be that we will get the first rate hike, marcus pricing in. 51-52% chance of a rate hike. >> would you agree that what is going on right now may be similar to the end of the brenton would monetary system? he said one after another, central banking assertions are being challenged right markets that are raising in hikes. what do you make of that? >> the markets are overly alarmed about inflation. i do believe inflation is likely to be higher in the next three years that we have seen the last decade, but when we say higher, we are talking about 2-3%, nothing alarming, but i think the markets are overreacting to short-term issues that may persist until 2022. labor shortages, supply chain issues, but i do not think it i

jonathan: the rba has validated the move overnight in australia. in the united states, remains to be seen what happens tomorrow. then it is onto to the bank of england on thursday. they have encouraged repricing at the front end of the curve. that is where it is globally, pricing and higher interest rates and pulling forward that view in the last month or so. tom: we talked to lisa earlier about shanghai and 30,000 people sequestered at disneyland. bring that over to better pandemic statistics here. bring that to a president who has to return to a fractious washington. lisa: and bring it over to the anti-forecast of frances donald. how do you square the bifurcated nation of the emergence from a pandemic with what is happening in the global economy, when you do have china with self-imposed restrictions that are at least in part going to get worse as you see certain upticks in the virus? tom: commodities, hard, soft. you mentioned iron earlier. why. -- why? jonathan: they want blue skies in china for the winter elliptic's. it is the demand peace in c

coming up, a huge week for central banks, decisions from the fed, boe, and rba. we'll dig into all of that next. this is bloomberg. ♪ ♪ tom: look back to the open. we are 15 minutes into the european trading day, and you're seeing some pretty strong reaction across the european stoxx 600, gains of .7% building on that record close that we saw on wall street on friday. in looking past, it seems for now, these inflation concerns and the central-bank action that is lined up for the rest of the weight. barclays is the corporate story we are focused on on the back of the news the ceo jes staley has stepped down as a result of the investigation by regulators here in the u.k. into his ties to jeffrey epstein. the new ceo is now seco -- ck venkat a christian, who be made ceo along with regulatory approval, the stock currently pairing heavy losses down 2%. it was earlier down more than 3%. paring some of their earlier pressure on barclays, across the story for you. with inflation still a top concern, a slew of central-bank decisions will reveal how the issue is being

>> some would say the rba is at an interesting crossroads. on tuesday, they suddenly dropped the three year bond yield target on the market started pushing it skyhigh. he came out and expressed his view that inflation is going to stay low until wages start raising more. investors still betting on three rate hikes of and 2022. it's important as you just noted that phil lowe has calmed things down a bit. he sees inflation hitting the midpoint of the target by the middle of 2023. he said he wouldn't hike rates until it gets to that point. in the past, he doesn't think it will get up until 2024. that's why people are looking for assume a rate but weibel watch for that monetary policy statement closely to see -- we will watch for that monetary policy statement. shery: another relationship that perhaps may be risking getting strained is opec-plus and president biden. what happened at that some? >> the decision effectively telling the u.s. it is concerned -- it's concern about inflation and desire for more oil is not it's problem. you are seeing wti

haidi: super interesting because we heard the same from the rba earlier this week saying abandonment of the target is not tantamount to saying the rate hike trajectory is going to get less patient. we heard pushback from christine lagarde saying the ecb is unlikely to hike rates into next year. saying there needs to be patients. that the economic recovery still requires a certain level of support and despite faster inflation, we will not be seeing the rate hike calendar going into next year. shery: we are watching the fiscal space closely as well given that we heard the announcement from the treasury earlier today and we are watching president biden's economic agenda. it seems the democrats in the u.s. might have gotten a harsh 2022 wake-up call especially from the races in virginia, new jersey and other parts of the country with voters flocking toward republican candidates. a warning ahead of congressional midterms in 2022 and what president biden can do with its economic agenda in congress right now. it seems progressive took -- seems progressive took -- progressives took hits acro

shery: what does that mean for the rba? swati: the rba was expecting the lockdowns to be temporary, and they were optimistic about growth and rebound. the only problem is that the rba does not expect to see price pressures emerging appeared they are not optimistic on inflationary pressures. they want inflation to be within the 2% to 3% target band. the rba does not expect that to happen until 2023, and that is when they expect rate hikes to start happening. shery: coming up next, petro grass unveils a new strategic plan. hear our conversation with the ceo just ahead. this is bloomberg. ♪ haidi: this is "daybreak asia." we are tracking the fallout of the global supply chain crump -- crunch. fed chair powell says they missed inflation a buy supply-side problems. pmi reports detail the monthly struggles of supply chain professionals, and the readings are fresh and forward-looking. a growing cohort of smaller companies that survived the depths of the pandemic say they are in danger because the economy is running too hot. floo

shery: does this data move the needle for the rba? reporter: only yesterday the reserve bank governor said that he is going to overlook the spike in inflation if it is not accompanied by wages growth. that goes to show how important wages data has become for the reserve bank. philip lowe months to bring wages growth higher, and that is why he wants to keep interest rates at record lows for some time. if the number is strong, it will definitely embolden rate holes, but the reserve bank will probably wait for some more quarters, maybe two quarters or more, because it has said it wants to see inflation substantively within the target. just one quarter of data is not going to be enough to move the needle, but it will definitely point to the fact that the market is right on this one. shery: our economics reporter with insights into the wage numbers. don't miss the fourth annual bloomberg new economy forum happening here in singapore, we will share discussions among world leaders on topics ranging from finance, trade and climate, cities and

the rba central bank governors talking about inflation. saying there's a low probability of meeting the cpi target in 2022. he's ruling out the fact when it comes to data, when it comes to the forecast don't warrant a rate hike next year, but perhaps a little less dovishness that the faster cpi target progress could see a rate rise before 2024, which is basically what the market has been pricing in now and pushing forward a lot of the rate hikes for australia. inflation pressures for now when it comes to next year not going to reach that target. haslinda: let's get back to the summit between biden and xi. both presidents have begun their face-to-face summit, aiming to stabilize relationship between the nations. downplaying expectations for major breakthroughs. pres. biden: it seems to me we have to establish common sense guardrails. to be clear and honest where we disagree and work together where our interests intersect, especially on vital global issues like climate change. it's responsible world leadership and you are a wager world leade

also from the rba walking back from its yield curve control earlier this week. talking the boe, that surprise decision to hold kicks off a global bond rally. you are seeing the u.s. 10 year about 1.51. joining us for more is eddie from our markets live team. what was your response to this decision? the economists were split 50/50. three weeks ago, andrew bailey said we must act. then he did not. >> you know, i think there is a lot of anger among traders yesterday. it is not just the fact that the boe did not act, it was the language from bailey where he said, it is not my job to guide markets. you know, traders said that they are frustrated and they were expecting certain -- we are in an age of forward guidance and that is what markets expect. we have seen two-year rates come down substantially, but the interesting thing is that we haven't pulled back to september levels. there is a lot of space. did you take bailey at his word when he said it was a reaction in the right direction? or do you say that we discount him completely because his job is not to guide mar

haidi: let's get you some of these rba meeting minutes just crossing the bloomberg now. this was during the meeting that we saw previously, bowing to market pressure, abandoning that target and signaling the raising of rates earlier with the previous guidance. this is what we are seeing when it comes to the meeting minutes from november, they are committed to keeping monetary conditions to support the broader economy. of course as states make their way out of lockdowns. services sector in particular as well as lifting the sentiment for staging the recovery. we had released -- we had seen a move when it comes to bonds coming into this. this was an opportunity for the rba to give some sort of clarification to have the narrative forced into hiking earlier that it's comfortable doing. they won't raise the cash rate until their inflation objective is net. we are also waiting to hear from the government speaking up on inflation later on today. it will be interesting to see how much of that is there, given the earlier move on rates starting to grow. it's really while we see the

this morning said the market has gone too far, too fast, too aggressive at pricing in hikes firm the rba. that is continuing to go off slightly. you are seeing tapering of nine basis points after ratcheting by eight times the target last friday. other notable red blotches, wti down by 1.44. brent down by 1.02%. the u.s., we understand lincoln put pressure on the emirates up their output. that could be very heated within the opec-plus gathering. francine lacqua is putting pressure on world leaders as they line up to do an interview with her in glasgow. how are you doing, francine? wrap it up for us. morning. manus: good morning, manus. i love coming on a review at this time, because it is the only time in the 24 hour cycle when they are not many people behind us. the plenary was packed. we also found out, quite difficult for delegates to get around, to get from one zone to the other. two days of world leaders talking about pledges, and it does seem there is a new catalyst coming from a lot of the world leaders on how much they want to do. we had pledges on protecting forests, curbing meth

kailey: you have the rba, boe, and the fed coming this week. the boe could be a live meeting and we could see a rate hike but the fed, hike is not on the table. what language do we get out of chairman powell and does he push back or let this pulling forward of rate hike expectations sit and not push back? jonathan: it comes down to his assessment of inflation and the path forward. once he explains that, we will work out what's next. the taper story and rate guidance, they were trying to say the rate story is distinct and separate from whatever we say about tapering except for market participants -- thank you -- what's next. this coming wednesday, we know the taper story is done. it sounds like it is on autopilot. beyond that, what's next? lisa: let's say, jay powell does not push back. do rates go even higher or do people stay where they are, or do they price in more rate hikes in this cycle given the fact that the fundamentals are so good at this point? jonathan: if you are not familiar with financial markets or tuned in accidentally, welcome.

tomorrow is the rba rate decision. early tomorrow morning in australia. i feel like that will dictate a lot of what front end yields do globally and what the rba says about market pricing. they do not defend the yield curve last week. guy: it'll be interesting. australia is a long way away. we have gxo tomorrow. we will hear what the aussies have to say. stay tuned tomorrow for the cop26 summit. we have the elections in new jersey, there is one in virginia we are watching very closely. local elections across the united states. lots of european earnings. standard chartered, bp. conocophillips on the other cited the pond. pfizer, kkr, and the main event, the federal reserve does today meeting kicks off. looking forward to that one. alix: coming up, jim gilmore, former governor of virginia, will be joining "balance of power" with david westin. this is bloomberg. ♪ >> from the world of politics -- >> i think the announcement of the framework means we will get both of these bills done. >> to the world of business -- >> we need a world data organization like

anyway, the rba's experiment with yield curve control. they say we will not let yields get above this level here, and if we do, we will buy up everything we need to to push them back down again. that only worked into it stopped working, which was last friday. you can see what happened to yields in australia as awfully shoul -- as inflation fears took hold. they scrapped yield curve control and let markets find their own level, but they are not raising rates yet. that is the story with the fed as well. inflation is far as the markets are concerned is here. you can see the five year breakevens have started to rise. they were cap too low for quite some time, but now they are starting to move. this has been the reaction in the futures market. we are now pricing in at the start of 2023 2.5 rate hikes. we were not supposed to move at all until 2023. so where does that leave us going forward? the fed is going to have to change something in its statements or its views, and they're going to have to get some kind of change in the labor market for a

you take a look at the rba. basically these front rates has gone bananas. and everything from the boe. we take a look at what it comes to the australia, to the u.s., europe traders are trying to price out the possibility of some of these rate hikes. but it been kind of marginal. david: it does go to show, it is like the dynamic in ordering, you almost overestimate we can really have. end of the day, you're the one left h olding the half eaten -- getting to the point of yvonne. before the weekend we are looking at maybe june. around the june meeting. compared to friday into this morning, that is down at 60%, which by the way, is still substantial which take us into the calendar of meetings into next year. you look at and everything from january to december, it is -- two rate hikes, but it has been pushed back. the first one as current pricing suggests this could change day today, the first one is in september. and the second one is in december of next year. rishaad: let's get to -- our policy editor kathleen hays. this taper, reduction in bond purchases, whe

the rba pushback on rate hikes when he spoke toward four hours ago. haidi: the bank of new zealand, financial stability report out saying that covid-19 is continuing to weigh on the economy. what are the effects there talking about -- they are talking about? kathleen: many are struggling coming out of the economy -- had to make. but you still there some baggage. -- the pandemic. there is still some baggage. how about business is dependent on support from the government, viable to keep paying workers and buy their goods and etc.? that could hurt those businesses. she transitions from being a covid pandemic to an endemic disease, that could cause financial instability. with the red housing market in new zealand, 30% jump in home prices in the past year, the rbnz says they see an increased risk of correction. when the governor was speaking yesterday and today, he indicated these concerns. the government is taking steps at this point and he says the rule is not that large. they still see more removal depending on how inflation and drops look at the medium

the rba overnight, bank been lynn on thursday. the rba basically validating the move at the front end of the curve area they had a yield coal -- a yield curve control target. it has been a big move. they validate that move overnight. into the u.s. two-year in and around 50 basis points. will the federal reserve pushback for the u.k. two-year? the chief economist from the bank of england says thursday is a live meeting. how live is that thursday meeting? we will debate that on thursday. iron ore, here's the chart. in singapore, iron or futures down -- iron ore futures down for the fifth straight session. china wants blue skies for the winter olympics, so they are pulling back on steel output. what i am trying to work out is how much of this big rollover in iron ore we are seeing is about that and how much of it is about a lack of demand right now off the back of what is happening in the property sector, of the back of what is happening with the economy more broadly, a softer economy in china. tom: that is one of the mysteries here,

on the back of that decision from the rba to drop its yield curve control. you see demand for the three year yield -- i should say bond, the yield slightly lower. we have commentary from the head of the reserve bank suggesting it is unclear when the bank will look to raise rates, focused on the fundamentals of the data. that is the aussie dollar now, lower by 0.7%, $.74 per u.s. dollar. let's get the bloomberg business flash. laura: a rise helped boost profits in the third quarter, the london-based profit rose to $1.8 billion, beating forecasts. loan provision were double analyst estimates. >> as we look forward every hundred basis points of improvement on a four-year basis, this was over $1 billion. laura: singapore's top central banker says he is watching for signs of accelerating inflation, and is ready to act, underscoring how policymakers are focusing attention on rising prices. he spoke to us exclusively. >> we know it cannot last forever. how long it lasts is hard to say . the longer they last, the risk of inflation becomes entrenched, and expectation

are the implications here for rba? >> rba has been saying all along that employment is key for their policy picture. last week, they ditched their yield curve control program after market bets they had it wrong on inflation and inflation is going to accelerate. even if they dropped their program, the governor was clear to remind markets that he does not plan to increase interest rates currently until 2024. that is because he does not see the wage pressure needed to get inflation sustainably into the 2%-3% target. he does not think that is going to happen. until that time, wages running half of what the rba thinks they need to at 1.7% in the recent quarter. the governor of the reserve banks -- bank thinks that needs to be 3.5 percent. he needs lower unemployment for that to happen. paul: australia passed another milestone in the battle against covid. 90% first dose across the entire country. here in new south wales, we are 90% double dose. as states begin to reopen and things get back to normal, what is the look out for

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the rba got possibly in their town tomorrow. the bank of england as mentioned. already have higher rates. that means within this context, we expect the fed to lead the way but this time they are behind. there is certainly a risk now that the fed goes into overdrive on the catch up which is what goldman sachs is talking about rate hikes for next year. it was never on the table even very recently. the key for traders really is yes, we will certainly get confirmation of a fast tapering. it will be a bit all over by the middle of next year. how quickly will not be followed by the first rate hike? it could come within a couple of months. that is the messaging traits are looking for. you can see the buildup in the futures positioning. over the past couple of weeks, short positions buildup in the u.s. treasury. not so much at the short and. curves are starting to flatten a bit. there is room for them to flatten further if the fled message -- fed messaging is not so clear, we will see a massive reversal and a far steepening of curbs. people will up all credibility on lo

at the hawkish end you have the rba, and the ecb at the other end largely staying dovish and unlikely to raise rates. we see a variety of reactions, and the fed will not necessarily be more hawkish. we expect them to move gradually higher next year, but we will not see an abrupt shift in real yields that will the real the economic recovery -- that would derail the economic recovery. tom: you see more upside in earnings and growth. what is underpinning that conviction? supriya: strong growth, we expected above consensus on our global growth expectations. just under 5% is what we expect next year. and the high nominal growth environment combined with inflation. especially in regions which have higher operational -- we would be more positive. in europe we expect 15% earnings growth next year, that is quite a bit of head of consensus. we still expect pressure on multiples, but a continued rally in equities driven by earnings. that is the picture looking into next year, strong nominal growth, and margins have been resilient, and we expect them to stay that way. dani: sorry to interrupt, i

this was after the rba had an upbeat outlook for the coming year though it did maintain a dovish stance on the rates outlook. we are looking at the potential for any soft data when it comes to jobs and wages adding to the drag along with the support from commodity prices. we have seen prices take a hit when it comes to base metals. chinese -- base metals have been under pressure. we have seen aluminum prices head to a bear market as we saw a three week drop in aluminum prices in london. we are sitting -- we are seeing china have to boost production. china's coal imports almost doubled in october from last year. >> let's get it over to vonnie quinn. >> tsmc says it does responded to a u.s. request for supply chain information. while ensuring no customer specific information will be exposed. it's firms will provide some data. flights from european hubs to the u.s. resume monday reviving some of the most lucrative routes for airlines. for the pandemic, british airways generated $1 billion in revenue each year from london heathrow to jfk in new york. flights are effectively limited to the f

the amount of constant —— quantitative easing they are putting into the economy and as you say the rba in australia have announced that they are keeping rates on hold and last week the bank of canada stopped their asset purchases. it is a real transition period at the moment and difficult balancing raising interest rates with high inflation.— raising interest rates with high inflation. great to talk to ou. high inflation. great to talk to you- see _ high inflation. great to talk to you. see you _ high inflation. great to talk to you. see you again - high inflation. great to talk| to you. see you again soon. uk businesses lost out on almost £412 million during the pandemic because their websites are inaccessible to disabled people, according to new research from purple. the research found that more than one in three disabled people had difficulties using websites during the peak of the covid—19 pandemic, at a time when the economy increasingly relied on online sales and many disabled people were asked to shield. so what should businesses be doing to adapt and improve their accessib

we're coming off the second slide in three days as the november gain has shaved to about 100 points 'rba ia me wee ckn mont >>> time for cramer's mad dash good timing. s&p just revised the outlook on ford to positive >> they sure shoo, given how much rivian they have. a lot of companies i talked about earlier have the supply chain in hand, some don't, some are taking matters into their own hands. jim farley talked about a deal he just made with global foundries, to address auto chip supplies together we hope to create a secure supply of feature-rich semis. the key term there is feature-rich the chips that are needed to make all the cars and trucks are called feature-rich, which means they're not the high-performance chips, but that's what's been slowing down ford. this is a breakthrough deal. he's dealing directly with -- i skew them for getting the job done i wonder whether secretary raimondo would weigh in on this. >> it's interesting. the president was an gm yesterday, drove the hummer, proof that america has what it takes. does that do anything to you to maybe have you take a fresh l

yvonne: wasn't as crazy as the rba and bond markets in australia, but you saw him trying to separate when it comes to the tabor announcement, which was largely expected with the rate hikes. different conditions on when they will be raising rates. but if you take a look at what he said, a lot of indications of a lot of questions, ambiguity, maximum employment would be, and you hear from christine lagarde correcting a little bit of the vagueness last week when it came to actually pushing against what markets are pricing in. the decision to -- >> the decision to begin tapering does not apply to any signal with interest rate policy. we have a different and more stringent test for the economic conditions needed to be met before raising the federal funds rate. >> in our forward guidance on interest rates, we have clearly articulated the three conditions that need to be satisfied before rates will start to rise. despite the current inflation surge, the outlook for inflation over the medium-term remains subdued. and thus, these three conditions are very unlikely to be satisfied next year. ri

we dealt with the rba overnight. what is interesting is today, we are getting a little bit of relief in the bond market. fairly big moving italian btp's, down by 13 basis points. yesterday, the complete opposite. huge move in the opposite direction. you are seeing that really across the board. we are looking at france, for instance, down by eight basis points today, which is fascinating. the bond market once again where the real action is. alix: you have to wonder what is priced in when it comes to the boe and the fed. in the u.s., extremely similar story. for the equity market, it does feel somewhat idiosyncratic. real estate, utilities, tech, consumer services all leading the way higher. under armour of all things one of the best performers within the s&p after they had strong demand and raised their forecast. to your point, you have a 13 basis point move in btp's. in the u.s., the two-year yield is down by about three basis points as you have some buying coming in. two things i did want to highlight. one, iron ore

we have the rba governor saying he does not think there will be much of an issue in australia? is he ok in a moderate inflationary environment? >> the key to it working is having a staying period of inflation. it does not have to be incredibly high but sustained for a period of time. where interest rates lag and catch up. in that world, these assets provide a good protection the overall portfolio, i should say. we find for example a sustained stagflationary period can generate an additional five percentage points of return. it does not have to be huge spikes. it can be maintained at moderately high levels. haidi: matthew peter joining us, we appreciate your time, and tune into bloomberg green and get in-depth analysis from the daybreak team. we are broadcasting live from hong kong. lots more ahead. this is bloomberg. ♪ haidi: this is what we are seeing at the start of trading in asia, asian stocks look to reassess after friday's stock market turmoil, relative calm when it comes to fx trading but equities look like for the downside. we are seeing higher trading volumes as well

at the front end in australia the rba has not stepped in. we basically doubled the front end of the u.k. and the united states in more than a month. lisa: some people say earnings have been so good, they crushed it. other people say liquidity is still going. pick your narrative and you can get legitimate data points to back it up. jonathan: if i said amazon would deliver the numbers they delivered and apple, too, that is what we got. lisa: is a tough one. jonathan: you will call it a teflon market? lisa: i am not. jonathan: i did not say either. let's finish on crude. wti looks like this. the president wants opec-plus to step in and do more. we can talk about the contradiction as well. 83.72 on wti. will opec respond? crude up .2%. that is the process at price action. let's get you some movers. we can do that with romaine bostick. romaine: it is all about the future. a lot of bets on the future. tesla closed out the month at a record high. stop that it been range bound for much of q2 and q3 rally 43%. starting out the new month up 4%. also i

you have countries like the rmb or the rba that are likely to be on hold for much longer, whereas you could give the bank of canada and others hiking several times next year. kailey: so it is not necessarily going to be broken down into an em/dm type of world, but more of a tightening and not tightening so fast kind of world? erik: i think you put it into three big categories. within the g10, you have the funders like europe, japan, and swiss, and the hikers. u.s., canada, new zealand, maybe even the u.k. who knows? within e.m., you have the separate complex where most of the hiking cycles there are most likely done, and that is unless there is a real significant worsening and the risk sentiment or inflation situation which forces even more hikes and these central banks to defend their currencies. tom: i'm looking at where we are in building out the currency impact, and it does fold into equity market calls into our economy as well. what is different now about the dollar debate as it folds into an american economic call more than 10 years ago for 30 years ago? erik: i think the realit

whether it is the fed or the boe or the rba, yet you have emerging markets' central banks being more hawkish pair would how do you play the divergence when it comes to really how you position in the market? -- more hawkish. how do you play the divergence when it comes to really how you position in the market? >> what is interesting to note is going into 2022, the fiscal cycle, the fiscal spending by government is starting to peek. we are seeing that peak in japan and some other asian countries. we've seen the government of singapore started raising rates, as has the bank of new zealand, etc.. i think central banks are still of the view that they want to see this recovery and for more sustainable terms. obviously the tapering side is the start of removing those emergencies. bond markets have run ahead of themselves to some extent. we are just starting to move away from emergency settings. quite comfortable to see a tapering take place, on obviously a very planned process by the federal reserve and other central banks around the world. shery: martin lakos, division director at macquari

looking ahead to the rba and zed institutes, they said it is overwhelmingly in favor of titer monetary policy. -- tighter monetary policy. so called shadow wars which reflects labor shortages of the few was not unanimous with some members more cautious about further tightening, haidi. haidi: sticking with that decision, and take a look at the kiwi treasure seeing that new zealand's dollar is poised to recover from that sharp decline we saw earlier this month. the bak is forecasting for that -- the bank is or casting for declines giving the outlet for the rate hikes. there is a potential to tighten faster than inflation. hence, parts of the markets wondering if we get more than 25 bids this week. 2 million australians set to retire as living costs surge. why it's a tricky issue. this is bloomberg. ♪ haidi: over 2 million australians are set to start drawing down on $220 billion of savings as every type your this comes as the same time as costs soar at the fastest pace in seven years. pension funds are under pressure. our managing editor ed johnson is can tell us more on the story. of

rba aerhi ♪ music ♪ ♪ dream, dream when you're feeling blue ♪ ♪ dream, dream that's the thing to do ♪ ♪ music ♪ when you see value in all directions, you add value in all directions. accenture. let there be change. >>> it is jobs friday and once again there are some high estimates. the average gain for jobs in october is about 450,000 that's the average estimates of all economists out there the question is whether there are enough workers however as rbc's chief economist tom porcelli points out, tuesday's election also matters from an economic perspective he joins us now on the cnbc news line welcome. before we get to your jobs number estimate, i want to talk about the election results we're not politicizing it but jay powell's job may or may not be in focus the election results you believe could influence the economy vis-a-vis the federal reserve. tie them together for us. >> good morning. look, i think it's -- we continue to field questions on whether or not powell will get renominated and our view straight through has been that he would i think his odds, from our perspective to

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>> well thanks, courtney you know, i would say i'm pretty mixed on the group overall i mean, at rba, we look at profits, liquidity sentiment i think there are some good things an bad things overall as mentioned, consumer still has a lot of money to spend and they will spend it into the holiday season so the numbers that these companies are going to put up are probably pretty good but as everybody is focused on supply chain issues and the ability to have pricing power, pricing power tends to go further up the supply chain. so obviously as consumer focus companies they're going to be at end of the supply chain and they're not going to have as many supply chain pressure and they are the most labor intensive. meanwhile, from a liquidity perspective, there is one sector that sticks out that tends to underperform as the fed is tightening as they start to raise rates which could come as early as next year, it is consumer discretionary sector and meanwhile, despite all of those dynamics, it is one of the most expensive sectors out there so i think there are better ways to get cheaper growth

this has really angered the rba stance. they don't expect to see the inflation target to return to that level for at least two years. they are expecting tightening as early as next year. shery: not only restricted to australia but all over the world. we've seen in the u.s., we are expecting those cpi numbers and we already saw cpi numbers in the u.s. accelerating the month of october. as we continue to see this monetary debate, we have this wildcard with news we had president biden interviewing fed governor brenner as he is contemplating whether to give chair powell another term. his term ends in february and brenner is generally seen as more dovish, so what does it really mean for monetary policy will be a key issue. haidi: a key issue will be looking at policy reaction ahead of the u.s. cpi numbers. factory inflation in particular. we have seen runaway levels, expected to come in at a 26 year high. all of this, while not having a huge impact on global inflation, that is likely to worsen for domestic chinese businesses. a

new zealand in rba decision week. leaving the broader asia-pacific msci index of one quarter of 1%. we are seeing haven demand when it comes to demand for australian bonds. coming up next, chinese health experts reviewing hong kong's covid-19 measures. we will get you the latest virus developments out of asia, next. this is bloomberg. ♪ shery: the head of the international olympic committee says he held a video call with the chinese tennis star. at the latest within a saga that is captured attention. let's crossover to our bloomberg china government reporter. this comes after a statement as well as a video with organizers of the chinese tennis tournament. does this allay fears? reporter: the short answer is no, not really. it was a 30 minute call and she assured she was safe. while it does help a little bit, it doesn't really satisfy as much as issue free to come out and speak openly without being surrounded, without being spoken or through these videos that could be staged. that is the suspicion. as you said, a suspicious reaction to the nature of these videos. shery: do we know

equally, perhaps on the rba, this is a knocking momentum to normalization. it probably confirms they want to wait and see and be quite dovish. it's uncertainty but uncertainty that cuts and a number of different ways, and given that i'm not expecting to see major changes from their staff in the next few weeks. they will be waiting to find out more with the variant means then we will see more moves. kathleen: the gdp number on the italian economy this week. how are you expecting will be absorbed by the reserve bank of australia, and also by the markets? sarah: it will be a negative on the headline number when sydney, new south wales were in lockdown. we're going to see a 3.3% decline in activity. that will sound shocking, but it won't be a surprise, and it is exceptional in the circumstances and that indication for what is happening right now and what will happen going into 2022. we already know the economy is recovering, we can see that in the high-frequency data, payrolls, some of the spending data. we know consumption is bouncing back, these economies are

we'll talk on their new 20-year naming rights deal when "techcheck" begins 'rba itwmites. so, you want evs, you have come to the right place. is that tom brady? yeah. he comes in to recharge, get software updates. you know. let's go! >>> welcome back as we head to a quick break. shares of cassava siciences getting hammered today as they face sec probe this is according to dow jones we reached out to cassava and we'll let you know when we hear more shares are down 25% right now. stay with us and t-mobile will pay for it! upgrade to the iphone 13 pro... on us. what if you could have the perspective to see more? at morgan stanley, a global collective of thought leaders offers investors a broader view. ♪♪ we see companies protecting the bottom line by putting people first. we see a bright future, still hungry for the ingenuity of those ready for the next challenge. today, we are translating decades of experience into strategies for the road ahead. we are morgan stanley. trading isn't just a hobby. it's your future. so you don't lose sight of the big picture, even when you'

a gap between rba and market pricing. aussie dollar set for a third weekly decline. it has been a choppy week for stocks. little change for the asx 200. health care up more than 2%. ahead of the tokyo open were seeing state futures in singapore edge slightly higher. as we digest october inflation data, elevated energy costs pose a challenge to businesses that are grappling with price -- pricier fuel bills, something the stimulus package may seek to address. shery: japan's prime minister has unveiled a bigger than -- set to unveil a bigger than expected stimulus package on friday. what do we know so far about the stimulus package the prime minister has been promising for weeks? >> what we've managed to get ahead of time is the bare-bones outline of what these figures are going to mean. it is a record in terms of fiscal stimulus. were talking about 55 trillion yen, which is 10% of gdp. you have to bear in mind that not all of the spending may be, some may be rolled over from previous packages that went unused and some may refer to loans and things that may not end up b

wondering when it comes year fixed mortgage rates, i know that you did have to hike them before the rba's meeting last week. but now that they have dropped the yield curve target, are we likely to see rates go higher? ross: you are starting to see fixed rates are really moving. they bottomed out for two or three year rates, well under 2%. that timed out by 50 to 70 basis points over the last couple of months, most banks have moved, but interestingly, variable rates, the variable rates has actually dropped. so you are seeing long dated bond markets influencing the price of bond markets. but a very competitive market here. all banks playing it, small banks, digital banks, it's a very competitive market. what we have also seen is in our business market, very strong growth. we have the biggest business bank in australia. we grow the market share in the last six months. we expect to see good growth in the market without the contraction and net interest that we are seeing in the housing market. rishaad: when do you see the first big interest rate hikes coming in, and what levels are you looking

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