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tv   Bloomberg Markets Asia  Bloomberg  September 28, 2021 10:00pm-11:00pm EDT

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the most open race in a decade. rishaad: and a bit of a selloff, to put it mildly. the s&p was down the lowest -- also looking for data from vietnam shortly as well. and evergrande weighing on things, but not today. yvonne: certainly as you mentioned it's a lot of bad news you're seeing here when it comes to the debt ceiling in the u.s., the fed hikes and that coupon payment due at evergrande today. rishaad: the nikkei 225 on a precipitous day as it were. the ldp leadership election taking place. general market sentiment is
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proving to be somewhat negative, to put it mildly. also comments coming through from elizabeth warren on jerome powell roles -- his nomination, calling him a dangerous man to head of the central bank. that is also weighing on things as well. u.s. treasuries just holding up, what if we got here? yvonne: we have been tracking what has been the supply train -- supply chain woes, being reflected in the gdp numbers. a contraction of six point 17%, economists were expecting growth of 2.5, so this goes to show the
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severity of supply chain woes we've been dealing with, the energy crunch right now and the stalling of factory output as well in china, the e.u. and the like. that's why were seeing a pretty aggressive selloff right now. talk about evergrande, that's another selloff today. rishaad: it's all down to the $1.5 billion it's going to be receiving from a regional bank in china. stocks moving to the upside, what we have essentially is the team coming into help evergrande , perhaps there lining up to buy some of the distressed assets that evergrande does have.
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at the moment that is bucking the trend. yvonne: what do you make of the selloff? are people just shedding assets, or is there something bigger that we are worried about right now? >> last night we saw the treasury yields moving higher. we saw the speed of the treasury yields tightening, and now we've seen treasury yields actually grown quite fast. this is one factor. inflation worries and also the rising treasury yields, and also even though covid impact is
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subsiding, china growth concerns continue to be worrying some sectors. especially with the new scaring customers about supply chain disruptions and inflation expectations going forward. yvonne: i'm wondering at what point do you think we will see foreign investors like japan start to look at this and start buying on these levels? we've seen that before, but i'm guessing seeing the equity market, that this time it could be different? >> right now, the concerns on the equity side, they are worried compared to february when people were slightly more optimistic over covid.
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now that covid seems to be subsiding, hopefully it will get better. going forward i think equity will remain choppy, but as you've been mentioning stagflation, the absolute growth levels remain quite decent. yes, it has been coming down with the different roles and also different growth expectations have been revised down. inflation lies there have been different inflation concerns, supply chain disruptions, etc.. with temporary price
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adjustments, how is that going to affect the wage price. those are all part of this argument. rishaad: how much are you looking at the path of where the dollar is? >> going forward in the near term, the rate hike, the tapering going forward, potentially the announcement in november and tapering afterwards , we will continue to expect the rate hike to push the treasury yields higher. rishaad: there is no correlation apparently between reducing bond purchases -- >> right now markets are looking
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more to the expectation of the rate hikes. it slightly more hawkish, the market was having a bit more clarity going forward but they're still pricing in a higher rate level until 2024. yvonne: we still see the market not converging with the dots. do you think there's some doubt that actually can hike rates in the next year or two? >> it's always the case that there are so many moving parts going forward, last week -- next week i'll be talking about the big property developer. every day it's different news.
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rishaad: it's almost an interest rate hike in itself, especially for countries like america where there so much driving going on in the driving season now. >> we continue to expect, for example the manufacturing sector has been an outperforming sector. yvonne: but you still prefer europe as a bright spot. can it stay that way, given what we are seeing? >> we been talking about europe since one or two months ago, the last time i came. but we still continue to see europe to be rising, picking up
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decently. the ecb is joining the club of tapering central banks. so we see that economic momentum might be picking up and there might be some inflation expectations it could impact their. rishaad: some changes in retirement funds, controversial changes. let's get the details from vonnie quinn in new york. >> deciding not to include -- the nikkei reports that the debt crisis has weighed on decisions by the world's largest pension fund. the dpi a it will use the benchmark global bond index. u.s. senator elizabeth warren says she won't support jerome powell for second term as fed
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chair. she's the highest profile democrat with the say the come out against him. powell's term expires in february. he does have bipartisan senate support and is likely to be confirmed again if president biden picks him. >> your record gives me great concern. over and over you have acted to make our banking system less safe, and then makes you a dangerous man to head up the fed, and it's why will oppose your renomination. >> backers of the leadership candidate have agreed to cooperate -- the ruling party votes wednesday for his replacement. the race is likely to be decided in a second round runoff. >> in the end, there will be in
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the runoff a realignment. or it could be some other arrangement. >> chinese president xi jinping is targeting a number of tech professionals. state media say china must embrace its reliance on high tech industries. he continues a regulatory onslaught on the digital sector. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. rishaad: on the thorny subject of taiwan, after the election of
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the approach china opposition party. coming up, were tracking the risk from energy supplier evergrande, and more. yvonne: will discuss investment opportunities in the post-pandemic world. that is still ahead. this is bloomberg. ♪
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yvonne: evergrande bills are
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piling up with another $45 million bond interest payment due. the fed has question wall street banks about their exposure to evergrande. rishaad: we should just call her the evergrande editor. how do we move forward here? >> the big thing will be this bond, creditors are claiming evergrande evergrande is guaranteed by, it was sold by an evergrande unit. there is the potential for cross default here. it's debts aren't really widely known about.
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as you mentioned, the $45 million coupon coming due today, we haven't heard word on the coupon that was due last week. we don't have clarity on that. there's a lot of unknowns hanging over that. in the meantime were seeing some of the u.s. hedge funds and u.s. investors buying up and seeing an advantage here, recovery bets on evergrande. of course we don't have proximity to the situation. there are lots of interesting bets being made here. yvonne: i read one report on why you're seeing these names buying evergrande bonds, basically suggesting you have to assume the recovery rates are higher than what the market is pricing in right now. then i look at something like gpi have with this line saying they've stopped buying chinese sovereign bonds into their investment portfolios.
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do you think it has big implications given the japan well not buying chinese bonds? >> i think it is incredibly important. 2021 was a big year for buying foreign bonds. also replication, changing the understanding of value. rishaad: you can understand corporate debt. >> you mentioned the implications for the broader macro outlook if we do see a slowdown in property. that's where i think you are seeing, even though we had nine straight days of injections, more broadly speaking the economy is going to take a bit of a hit here. when you look at onshore spreads on corporate debt, you do see those spread starting to rise. even with extra liquidity we're
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seeing the first signs of stress in the broader market. we haven't really seen that thus far. so i wouldn't be expecting reevaluating sovereign bonds here. yvonne: what should we be looking for? >> the 30 day grace period on the coupons will allow evergrande to buy some time. on the $270 million, there is no grace. , there's just five days if there's some kind of technical or administrative error. when you add up all the liabilities and all the payments coming due, it doesn't quite make a dent, that the thing to remember is bond totals are low down on the priority list for beijing and evergrande is paying off what it needs to solve its
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problems. it's wealth management product and homebuyers. rishaad: rebecca, thank you very much indeed. yvonne: coming up, the global energy crisis continues with more power curbs put in place in china and europe. here are conversation with the secretary-general, next. this is bloomberg. ♪
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>> this is just the first inning of a multiyear potentially decade-long commodity super cycle. we have the war on climate
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change. >> it should be a wake-up call to speed up the conversation toward a fully sustained economy. >> if electricity prices drop, you simply produce more and store it. that's what we are missing right now. rishaad: some of the energy bigwigs we've been talking to this week. you look at some of these energy components as well. a short squeeze, concerns about supplies going up in the winter. we have those concerns in europe as well, lifting up natural gas futures. aluminum reversing some of those declines of the last couple of days. stockpiles in the u.s. did see a bounce to the upside.
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brent crude up $.11 on the barrel. yvonne: opec expects global fuel consumption to recover by 2023 but global demand will continue growing to the middle of the next decade. >> we are past the peak of the pandemic, and the car -- recovery will continue. it may be slow and it may be bumpy, but we aren't -- we are on the back of a positive trajectory. >> saying we won't need as much oil from opec until 2026. so is it correct to assume that
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between now and 2026, still are going to have to have restraint and cuts? >> the outlook in 2021, the first outlook released by any reputable institution, we are positive in this outlook in that demand will continue to grow. we are projecting 28% growth in energy between now and 2045. the world population is going to go -- to grow by about 20%.
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we have also projected that the global economy will more than double between now and 2045. we believe that therefore the world will double its efforts in achieving with the united nations the results. yvonne: that was the opec secretary-general speaking from vienna with bloomberg earlier. we are not seeing a lot of movement in the stock market but it was a shocker when it came to that gdp report on the third quarter, unexpectedly contracting more than 6%. economists were expecting 2.25%
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it just shows the supply chain woes that are plaguing the economy right now. rishaad: a mix contraction. let's look at what's going on with equities as we head toward the japanese lunch break. steep declines in japan. looking closely at that government pension investment fund. the topics led lower by virtually every sector. the only one on the way up is the transport index. it's a big day in terms of politics as well. yvonne: japan's ruling party
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picks a new leader to replace the outgoing prime minister. that is ahead. this is bloomberg. ♪ (announcer) the core is key to losing weight, getting back in shape, and feeling good. introducing the aero trainer, designed to strengthen your core, flatten your stomach, and relieve stress and back pain. it conforms to your body and increases muscle activity. abs, back, obliques, hips, and glutes.
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yvonne: all right. just approaching the lunch break in tokyo. equity markets gaining -- or i should say losing following this global selloff. 2.5% lower for the nikkei. it seems like when it comes to who is going to win, i think most investors are pretty optimistic about the politics side when it comes to japan. regardless of who wins. rishaad: equity markets going on
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an absolute tear for the next few days. we will have a look at the race and two of the potential winners, maybe. a two horse race. let's bring in our correspondent. >> we have four main candidates who will be vying for leadership today. the four will have a single vote among the million plus rank-and-file of the ldp across the country, plus the lawmakers will vote early this afternoon. if there is no clear majority, the top two finishers will have a runoff and it will be a different kind of vote. the rank-and-file will not vote. you will have the 300-plus lawmakers vote, plus one representative of each 47 regions. it will be a much smaller pool to pick and the second runoff. that might favor a different candidate. let me get real quick to it. taro kono is the leading horse, as well as fumio keisha -- kis
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hida. both english speakers, both were foreign ministers. kono was the former defense minister, as well. he is probably the most popular by public opinion and also the business community, and especially the young in japan. he might win the first vote. but if you don't get that clear majority, they will have the runoff, where that might favor kishida, who is more popular among the bigwigs, the party stalwarts in this faction. we are gearing from local media, japanese media reporting that he and the leading female candidate, perhaps they will join forces to try to beat kono. if it goes to a runoff, that might favor them. yvonne: it seems like for the
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market, though, they don't really care who comes out as the winner here because everything is better or anything is better than before. i'm wondering in terms of monetary and fiscal policy, are we likely to see any changes? >> not likely to see different monetary policy yet. she has branded hers as sunday economics. she would be more of a continuity candidate with abenomics. she had been picked by abe as his pick. you might get a little bit different from the others. kishida came in second last year, by the way. you just have to see as far as fiscal stimulus coming out of the covid pandemic, not even out of it yet, they are coming out of the states of emergency, which will be lifted in the next couple of days, which should give a shot in the arm to the japanese economy. in addition to the stock market rallying in september some 8%. fiscal stimulus has been a main
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driver of all of these candidates, to spend in the short-term to come out of this pandemic. rishaad: we have to address the geopolitical side of this. the candidates have different credentials in terms of how they look at japan's peaceful constitution. >> absolutely, where the more conservative hawk would be the female candidate, she is widely considered -- she has visited the shrine, she has been more hawkish toward china. kono and kishida, both foreign ministers formerly, a bit cautious on china's rise. this will be longer-term a bigger issue for the next leader of japan. yvonne: thanks. earlier, we did speak with an ldp lawmaker in japan's upper house for her views on how this vote may go.
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>> japanese voters are very mature. they are willing to accept a female prime minister ship at this point, but they are also very deeply looking into the ideological positions that each of these four candidates take. and as i understand at this point is that mr. kishida is at the top of this race. mr. kono is very liberal. mr. kishida's center liberal. the female candidate is center-right. the other is very liberal. the voters, the ldp party members and most of the
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politicians, but the party members and the politicians except the will of the voters, so as we understand at this point, people are willing to take more liberal lines than before, but not 2 -- too liberal because that could ignite center-right enthusiasm. and that is something -- that is something not many people want. >> i'm really interested to see how you feel about this particular alliance. we are hearing from a newspaper that the backers of kishida are set to cooperate if either of them go to a runoff. what do you feel about this kind of arrangement? >> in the runoff, there could be
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realignment and there could be mitigations across at a logical lines. that is what happens within a party on elections. this is all about what happens within the ldp party. we are the ruling conservative party. we believe in open economy, free trade, so there are variations within the party lines, but in the end there could be in the runoff a realignment of one group joining mr. kishida's group or some other arrangement, but that can really balance out what ldp stands for. at least to these four people making their voices heard, and whoever wins must take into
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account the different positions and strong policy preferences of the other three. rishaad: ldp lawmaker speaking to our very own haidi. we got a rate decision this afternoon in bangkok. we got the finance minister of thailand speaking about monetary policy, saying it should be accommodative and sing fiscal policy should be in sync as well. that is 50 three minutes before the start of trading there. yvonne: most economists are still expecting them to hold today. they are expected to ease restrictions reo co there are still two forecasting a potential cut today. rishaad: let's have a look at more congressional divisions as joe biden tries to get his stimulus plans across the line in congress. let's get that and the rest of the first word news with vonnie quinn.
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>> first i want to tell you about the most on record in the third quarter. top antivirus policies shut factories. vietnam was successful in limiting infections early on in the pandemic. officials say many promises -- provinces have been under prolonged social distancing measures. u.s. democratic progressive lining up to defy speaker nancy pelosi and oppose the bipartisan infrastructure bill, a blow to the measure's chances and potentially endangers president biden's economic agenda. the infrastructure bill had already passed the senate, but liberals in the house insist democrats passed a larger social spending package before voting on that vote on the previous measure. chinese president jean jinping is targeting -- xi jinping is
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targeting more development spending. china must embrace self-reliance in high-tech industries. it comes as he pushes the doctrine of common prosperity and continues the regulatory in slot the digital sector. global news 24 hours per day powered by more than 2700 journalists and analysts. i'm vonnie quinn. this is bloomberg. yvonne: coming up, we speak to stephen anderson about the growing humanitarian crisis. this is bloomberg. ♪
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rishaad: have a look at southeast asia. we've got the vietnam growth read. the worst rate since that did start off. jakarta is looking at a bit of life. we are missing one coming on stream in about 20 minutes and that would be thailand, as well. we've got some comments from the finance minister. yvonne: taking a look at some of the key stories and southeast asia. in thailand, the central bank is supposed to hold the key rate at a record when it meets in a few hours. before the decision, we will get
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the industrial production data. in singapore, the latest data shows the population shrank by more than 4% on the year led by nonresidents with a 10% drop. it has been seven months since the military takeover in myanmar , but the u.n. world food program is saying that ongoing conflict as well as social economic disruptions or exacerbating food insecurity and malnutrition. the number of people facing hunger could more than doubled to over 6 million by october, against the backdrop of covid-19, economic deterioration, and the ongoing political crisis. rishaad: let's get over to stephen anderson. thank you for joining us. you are saying that this latest wave of covid, the third wave in vietnam, has really hit the country like a tsunami. give us a sense of how bad things are on the ground. stephen: i would say that the
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worst of the third wave of covid has hit in july and august. we seem to be slowly recovering, although it really affected all towns, all parts of the country. we saw very high numbers of people struggling to get oxygen, struggling to get medical care. but what we are concerned about is the socioeconomic impact of covid and the fact that it has pushed more and more people who were already extremely vulnerable further into poverty and hunger. we are concerned that we are going to be seeing in the coming months further pictures of people facing extreme deprivation and -- in myanmar. yvonne: how has the picture
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changed since the military to? how was it before the coup and how is it now? >> before the military takeover in february, already there was an impact from the previous waves, particularly the second wave of covid last year. already, the u.n. development program and estimated that about 80% of the households last year had lost up to 50% of their income just due to covid. then we have of course already myanmar is the poorest country in southeast asia, and then we have had additional shocks following the military takeover in terms of we have had job losses, the world bank estimates that about one million jobs would be lost this year. and we have had banking issues.
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we have had also food price rises, including rice by 20%, cooking oil by about 60%, fuel prices have been soaring. the myanmar currency is at the lowest level it has been in history. we are concerned that the cumulative impact of this is putting pressure on the most vulnerable segments of society and these are people who spend about 70% of their household income just to buy food. and something has to give. rishaad: is the government or the military at the moment -- is an more of an impediment then help currently and what sort of
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traction are you getting in terms of getting food to the people who need it? stephen: the world food program, when we saw evidence, of course we had some fears, but we gathered evidence that the situation was worsening. we did start to mount an operation. in fact, originally we were assisting around one million people prior to this year. then we decided to triple that to a bit over 3 million and focusing primarily in urban areas where people were impacted most. i have to say that we have received cooperation in terms of facilitating our access to these areas. where we still face a challenge is for accessing people who have been recently displaced in many
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rural areas across the country in different clashes. so, the you and acr estimates over 200,000 people have been displaced from these clashes and our ability to get in has been limited, but we continue to do our best to try to assist people in these areas, as well. yvonne: what sort of response have you gotten in terms of from the global, international community? has anyone come in a big way to at least intervene in this on a humanitarian front? what sort of response have you seen? >> funding has been a challenge. that is probably one of our challenges going forward. we will continue to need the support, the increased support of the international community. we have had maybe one third more
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funding than we did last year. however, the needs are very much outstripping what we are able to mobilize. we have been able to assist one million people one we would have wanted to assist by now 2 million people. if we don't receive further funding, we will have to scale back, if not stop our operations in november. but other supports in other parts of the country, we do expect that to continue, but we are also in the process of trying to understand what would be the estimated needs for the year 2022 and unfortunately, we don't see an end in sight. rishaad: very quickly, is there any way people can help if they wanted to donate, for instance? >> of course, through the
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website, there are ways to donate to the world food program and different efforts, and of course there are a lot of information on the website in terms of learning about the situation in myanmar and other countries affected by similar crises. yvonne: thank you so much for joining us and telling the myanmar story. stephen anderson there. coming up, we take a look at the best and worst places to be during the pandemic. some countries are providing a new model for how to emerge from covid-19. our resilience ranking is up next. this is bloomberg. ♪
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>> we are excited to be part of this return back to the city. we will be bringing close to 5000 people back to this office over the course of the next six months and we are thrilled to be part of that resurgence. yvonne: that was deutsche bank on its plans to return some of their staffers to new york offices. rishaad: we have seen a number of changes to the bloomberg resilience ranking. as the world learns to live with the delta variant. yvonne: let's bring in our
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managing editor. what are some of the biggest changes we have seen? >> we have a new number one. ireland is leading the charge of a bunch of european nations to the top of the ranking, overtaking norway, which has been number one for a couple of months. there is still a vaccination record, 90% of adults vaccinated over there. plus, it is really facilitating reopening and travel, which is key to our resilience ranking now. how economies are resuming normalizing and reopening to the outside world. big moves and a few other places. singapore and new zealand falling quite significantly as they continue to grapple with the shift from quashing every single virus case to dealing with the more transmissible delta and moving into a position where they can more readily live with the virus, but without the deaths we have seen elsewhere.
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the u.s. done a couple of notches has its vaccination rate hits a wall in the outbreak accelerates. rishaad: give us a sense of how the delta variant affects countries around the world and their plans in the future. >> well, it is much more contagious. it is proving much harder to contain, particularly for those countries that all of last year were able to keep covid out. a lot of them in the asia region. china, new zealand, singapore, taiwan. it is really crossing that covid zero strategy. the vaccines are slightly less effective on it also means that we need a higher level of herd immunity or vaccinated immunity to open up. from 70% what we were thinking last year to more like 80% or 90%. what we are seeing in europe as they are still seeing cases,
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they are still seeing deaths, but vaccination has made a dent and they do have some of the highest vaccination rates in the world thanks to really get incentives like the vaccination passport. ireland, you can't even get into a pub without being vaccinated there. yvonne: emma o'brien in auckland. europe giving a model of how it is done here. southeast asia very much at the bottom of those rankings this month. you talk about vaccination rates. singapore has one of the highest , yet they are still talking about how there is confusion about opening up. there are reports from our team talking about sources saying there are concerns about infighting within the ruling party about whether to reopen or not. rishaad: rishaad: a bit of a head scratcher yesterday, when the cdc came out and basically moved singapore and hong kong up one notch, when they said that was a mistake and that hong kong still remains level 1 here.
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we have had the average number of cases over the last seven days has been four, then three the day before yesterday, whereas singapore 1647. we should put a caveat that these are mainly asymptomatic, as well. yvonne: here you have hong kong, where we are trying to open up, but vaccination rates are not quite there, but you are hearing from the likes of bernard chan from the executive council saying their hands are tied because they are pretty much sandwiched between when beijing says and what local government wants to say. rishaad: let's check in with markets. down to say the least. this is a lot to do with inflation angst and the like. it has set the mood music for today. we have stocks, bond yields spiking up as well. concerns about inflation.
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some sparring comments. from senator elizabeth warren, slamming jerome powell on his track record on financial regulation, saying he is a dangerous man to head up the fed. yvonne: just one of the many tensions. this is bloomberg. ♪
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>> from the heart of where innovation, money, and power collide in silicon valley and beyond. this is "bloomberg technology" with emily chang. emily: i'm emily chang in san francisco and this is "bloomberg technology." coming up in the next hour, a sea of red for tech stocks. concerns mount over the debt ceiling deadlock.


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