# Daybreak Weekend: US CPI, Europe Energy, RBA Decision

An episode of [Bloomberg Daybreak: Asia Edition](https://invisiblenetwork.ai/podcast/1663863437), 7 Aug 2026, 39 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/d15648c4-cee0-4e99-a5ca-af80014d921d/9a712a25-9bdb-4556-aab2-b49f013aa668/audio.mp3?utm_source=Podcast&in_playlist=27143354-63aa-4ac5-965d-af80014dc0d3

Bloomberg Daybreak Weekend with Host Nathan Hager take a look at some of the stories we'll be tracking in the coming week. • In the US – a look ahead to U.S CPI and PPI data, along with a focus on 3 stocks for the week ahead. • In the UK – a look at some of Europe's biggest energy companies on their recent performance. • In Asia – a look ahead to a monetary policy decision from the Reserve Bank of Australia. See omnystudio.com/listener for privacy information.

## Transcript

[0:00] Speaker 1: Bloomberg Audio Studios, Podcasts, radio news.
[0:10] Speaker 2: This is Bloomberg Daybreak Weekend, our global look at the
[0:13] Speaker 2: top stories in the coming week from our Daybreak anchors
[0:15] Speaker 2: all around the world. Straight Ahead on the program, we
[0:18] Speaker 2: look ahead to some key inflation data in the US
[0:21] Speaker 2: and how they may affect FED policy moving forward. I'm
[0:23] Speaker 2: Nathan Hager in Washington.
[0:25] Speaker 3: I'm Caroline Hepke in London, where we're examining the extent
[0:28] Speaker 3: of Europe's energy crisis with earnings in focus.
[0:32] Speaker 4: I'm Doug Krisner, looking ahead to next week's rate decision
[0:35] Speaker 4: from the Reserve Bank of Australia.
[0:38] Speaker 1: That's all straight ahead on Bloomberg Daybreak Weekend on Bloomberg
[0:42] Speaker 1: eleven three YEO New York, Bloomberg ninety nine to one, Washington, DC,
[0:46] Speaker 1: Bloomberg ninety two nine, Boston, DAB Digital Radio, London, Syrias,
[0:51] Speaker 1: XM one twenty one, and around the world on Bloomberg Radio,
[0:55] Speaker 1: dot Com and the Bloomberg Business App.
[1:02] Speaker 2: Good day to you. I'm Nathan Hager. We begin today's
[1:05] Speaker 2: program with some key inflation data in the US. The
[1:08] Speaker 2: Consumer Price Index for July comes out Wednesday, followed by
[1:12] Speaker 2: producer Prices on Thursday, plus a read on how consumers
[1:15] Speaker 2: may be dealing with higher prices when we get retail
[1:18] Speaker 2: sales for the month of July. On Friday, for more
[1:21] Speaker 2: on what we can expect from all this data, we
[1:23] Speaker 2: were joined by Bloomberg new senior strategist Edward Harrison, of course,
[1:26] Speaker 2: the author of the Everything Risk newsletter. Great to see
[1:29] Speaker 2: on the weekend, ed thanks for coming in. So what's
[1:32] Speaker 2: the risk that price pressures pick up in July?
[1:36] Speaker 5: That is a good question. I think the risk that
[1:38] Speaker 5: they pick up is not what's currently discounted by the market.
[1:43] Speaker 5: The market is thinking that we had inflation of two
[1:46] Speaker 5: point six percent and that inflation will fall to two
[1:50] Speaker 5: point five percent going forward. This is the core number
[1:53] Speaker 5: that I'm talking about now. The broader number is going
[1:58] Speaker 5: to be above three percent, but the Federal Reserve generally
[2:01] Speaker 5: looks at the core number because that gives them a
[2:03] Speaker 5: sense of where the overall trend is going.
[2:07] Speaker 2: So, where do we see price pressures continuing right now?
[2:12] Speaker 2: And are we still on the disinflationary track even if
[2:16] Speaker 2: we don't see changes to Fed policy.
[2:19] Speaker 5: I would say that we're not on the disinflationary track,
[2:22] Speaker 5: and that is the problem for the Federal Reserve that
[2:26] Speaker 5: we've stopped disinflating. That is, inflation is not going down further,
[2:30] Speaker 5: it's and and potentially it's rising more. And part of
[2:34] Speaker 5: the reason is is because when you look at numbers
[2:36] Speaker 5: like services, I think a lot of people look at
[2:40] Speaker 5: something called super core services. Both for the number that's
[2:45] Speaker 5: used for personal income and expenditures that's the PCE number,
[2:50] Speaker 5: and then this number that we're going to see this
[2:52] Speaker 5: week later on, both of those numbers, those super core
[2:56] Speaker 5: numbers are higher than the baseline number. And what it
[2:59] Speaker 5: says is that even if you look at core, you're
[3:03] Speaker 5: not looking at a number that is reflective of some
[3:08] Speaker 5: of the percolating inflationary symptoms that are in the economy.
[3:13] Speaker 2: So what's keeping those services numbers higher? And is there
[3:17] Speaker 2: anything that Fed policy can do to bring them back down?
[3:20] Speaker 2: Are you saying that there is a risk that we
[3:22] Speaker 2: could start to see the FED think about invoking policy
[3:26] Speaker 2: to get some of those prices back to where they
[3:28] Speaker 2: want them.
[3:29] Speaker 5: Yeah, we definitely could. I think we're seeing definitely financial
[3:33] Speaker 5: services as part of that. Healthcare is another part of that.
[3:37] Speaker 5: Generally speaking, what we're seeing is if supercore services is
[3:40] Speaker 5: well above three percent three point eight percent, actually using
[3:43] Speaker 5: the PCE version that says that at its core numbers
[3:48] Speaker 5: that geopolitical risk has nothing to do with are high,
[3:52] Speaker 5: and therefore the Fed might have to go against that.
[3:55] Speaker 5: We saw last week, however, on Friday, that when the
[3:59] Speaker 5: jobs numbers came out, they were relatively poor. That is,
[4:03] Speaker 5: the non farm payroll number was down, the unemployment number
[4:07] Speaker 5: was lower, which is good, but it was just enough
[4:11] Speaker 5: to make people think that the Fed will not raise
[4:13] Speaker 5: interest rates at its next meeting, nor is it completely
[4:16] Speaker 5: priced in for the meeting after that either.
[4:18] Speaker 2: As you mentioned, with those jobs numbers, it does seem
[4:20] Speaker 2: as though the market is giving the Fed a little
[4:22] Speaker 2: bit of a breathing room when it comes to policy.
[4:26] Speaker 2: But if we see a pretty elevated inflation number, does
[4:31] Speaker 2: that change the forecast? I mean, is there a possibility
[4:34] Speaker 2: that we could see those numbers come in a little
[4:37] Speaker 2: bit hotter. Definitely, we could see that.
[4:40] Speaker 5: And one of the things that's behind that is Kevin
[4:42] Speaker 5: Wortsz is the new Federal Reserve chairman, and he's been saying,
[4:46] Speaker 5: we don't want you to look at what we're doing
[4:48] Speaker 5: and what you think we're gonna do. We want you
[4:50] Speaker 5: to look at the numbers and come up with your
[4:52] Speaker 5: own thinking about that, And what that ultimately means is
[4:55] Speaker 5: every single time that we get a data print, the
[4:58] Speaker 5: market will be more volatile in terms of reacting to
[5:02] Speaker 5: that specific number then it was in the past, because
[5:06] Speaker 5: we're getting less information from the Federal Reserve about what
[5:09] Speaker 5: they're going to do, that less forward guidance from the
[5:11] Speaker 5: Federal Reserve. So if that number comes in hot, as
[5:13] Speaker 5: you say, Nathan, then I think that the markets will
[5:16] Speaker 5: react negatively.
[5:18] Speaker 2: Of course, we saw some reporting this past week that
[5:21] Speaker 2: the Chairman is keeping open the possibility of hiking interest
[5:26] Speaker 2: rates if inflation prints do come in too hot after
[5:30] Speaker 2: the relative lack of guidance that we got at the
[5:32] Speaker 2: last FED meeting, is there a chance that we could
[5:35] Speaker 2: see the Fed lean toward a hike just to get
[5:38] Speaker 2: back some of that market credibility.
[5:40] Speaker 5: Well, potentially. However, the jobs number that we saw last
[5:44] Speaker 5: week took a lot of the impetus out of that move,
[5:48] Speaker 5: because now the market's not even pricing it. If the
[5:50] Speaker 5: market's not pricing it, then the Fed may not do
[5:54] Speaker 5: it as a result of that. It's hard to say,
[5:56] Speaker 5: because we're in a new regime.
[5:57] Speaker 3: Now.
[5:57] Speaker 5: But if the Fed does not raise rates in September,
[6:02] Speaker 5: then suddenly you're in a situation where October, which is
[6:05] Speaker 5: right before an election, is the potentially the first time
[6:08] Speaker 5: that you're going to raise interest rates. So legitimately September
[6:12] Speaker 5: is probably a better time just from a purely practical stance,
[6:17] Speaker 5: given that Donald Trump is a vocal FED critic, but
[6:23] Speaker 5: it's hard to say how the Fed is thinking about that.
[6:25] Speaker 2: I really appreciate this set again, Thanks so much for
[6:27] Speaker 2: coming on with us on the weekend. That is Edward Harrison,
[6:30] Speaker 2: senior strategist for Bloomberg News and the author of the
[6:33] Speaker 2: Everything Risk newsletter. Let's take a look now at some
[6:36] Speaker 2: stocks making news in the week ahead. I'm Nathan Hager,
[6:38] Speaker 2: joined by Bloomberg News reporter Judy LaGrue, and the earning
[6:42] Speaker 2: story continues well right away on Monday when we hear
[6:46] Speaker 2: from Him's and hers after the closing bell. I mean,
[6:49] Speaker 2: it feels like healthcare earnings have been going pretty good
[6:51] Speaker 2: so far this season. Does that include telehealth, Judy?
[6:55] Speaker 6: Do you know tell my health is having a really
[6:57] Speaker 6: interesting sort of season with this earning season. But Hyms
[7:01] Speaker 6: and Hers, I think is certainly a space to watch
[7:04] Speaker 6: for a lot of investors. The company is be EPs
[7:08] Speaker 6: estimate six of the last ten quarters. It's you know,
[7:10] Speaker 6: really seen a lot of growth recently, however, that growth
[7:13] Speaker 6: is kind of slowing down right now. So reported subscriber
[7:16] Speaker 6: growth was about thirty five percent for sixteen straight quarters,
[7:20] Speaker 6: but for the last two quarters growth has been nine
[7:23] Speaker 6: percent and about thirteen percent perspectively. So I think what
[7:26] Speaker 6: a lot of investors are really looking at is how
[7:30] Speaker 6: Hymns ticker HIMS is responding to that slowing growth. So
[7:36] Speaker 6: stock movement is also an interesting space to watch. The
[7:40] Speaker 6: stock is down about nine percent this quarter alone, so
[7:44] Speaker 6: definitely for investors looking to see Hymns and Hers earnings
[7:48] Speaker 6: results and then how that stock will respond to the
[7:51] Speaker 6: growth and report.
[7:52] Speaker 2: Yeah, it's interesting, Judy. Ahead of this earnings we heard
[7:55] Speaker 2: Hymns announce a new app with a doctor led AI
[7:59] Speaker 2: native experience. I think anytime anybody hears the letters AI,
[8:04] Speaker 2: their ears start to burg out.
[8:05] Speaker 6: That's right, that's right, Nathan, And I think for Hymns
[8:09] Speaker 6: and Hers, certainly trying to really push the envelope with
[8:13] Speaker 6: respect to getting their consumers to stick with them, I
[8:17] Speaker 6: think is certainly paramount for the company. One item as
[8:20] Speaker 6: of note is that there was an FTC or is
[8:24] Speaker 6: an FTC rather lawsuit against his and Hers. The plaintiffs
[8:29] Speaker 6: are FTC Utah and Los Angeles County, and the lawsuit
[8:34] Speaker 6: is alleging that Hymns and Hers has misled customers into
[8:39] Speaker 6: locking themselves into recurring subscriptions and that the company has
[8:43] Speaker 6: shared private information with Meta and Snap despite saying that
[8:48] Speaker 6: they were protective of customer privacy. So definitely, you know,
[8:54] Speaker 6: I think investors will want to know what the company
[8:56] Speaker 6: has to say about this. Certainly, the company has come
[8:58] Speaker 6: out to say that the FTC lawsuit disregards substantial evidence,
[9:03] Speaker 6: So look for analyst questions on that. Look for stock
[9:07] Speaker 6: moves based on what management says about this. I really
[9:10] Speaker 6: think it's a space to watch.
[9:11] Speaker 2: Yeah, nobody likes illegal overhang over any company. The earning
[9:16] Speaker 2: story continues on Tuesday and other tech name reporting in
[9:19] Speaker 2: core Weave after Tuesday's close, putting a focus back on
[9:23] Speaker 2: AI infrastructure after all the concerns about hyper scale spending.
[9:27] Speaker 6: That's correct, Earnings from core Weave tick r cr WV
[9:33] Speaker 6: will show whether enormous EI demand can outweigh the heavy
[9:37] Speaker 6: cost of data centers and debt. Right, So the company
[9:41] Speaker 6: is expected to report its highest revenue since their IPO
[9:44] Speaker 6: in twenty twenty five. It's sort of Wall Street is
[9:47] Speaker 6: expecting two point five billion in revenue this quarter, so
[9:51] Speaker 6: you know, really looking at really how core Weave is
[9:55] Speaker 6: managing that. And I think that Bloomberg Intelligence analysts really
[9:59] Speaker 6: hit the new on the head that satan when they
[10:02] Speaker 6: wrote that core Weave's second quarter earnings will signal to
[10:05] Speaker 6: investors whether AI demand remains stronger than their share price implies,
[10:10] Speaker 6: and they excited that they feel like the share price
[10:13] Speaker 6: is underperforming, so they'll be looking at revenue specifically for
[10:16] Speaker 6: their earnings, and Bloomberg Intelligence really believes that the revenue
[10:21] Speaker 6: for Kreweve for the quarter could exceed guidance.
[10:24] Speaker 2: Now, that would be a pretty big turnaround at a
[10:26] Speaker 2: time when, as you know, Corewave's kind of missed more
[10:30] Speaker 2: often than not when it comes to earnings. Is the
[10:32] Speaker 2: bar pretty high then for core Weave to outperform this
[10:35] Speaker 2: time around?
[10:36] Speaker 6: I mean you're right about that, Nathan. The company has
[10:38] Speaker 6: missed EPs estimates four times out of the last five quarters.
[10:43] Speaker 6: So yes, definitely looking at that, looking at revenue, looking
[10:46] Speaker 6: at EPs, and really understanding from management, and again the
[10:50] Speaker 6: earnings call and comments are really going to be big
[10:53] Speaker 6: here where they see the company going. Analysts, on the
[10:57] Speaker 6: other hand, are quite bullish. Twenty nine buys eleven holds
[11:00] Speaker 6: three cells. So again we'll be listening to that earning
[11:04] Speaker 6: call quite closely.
[11:05] Speaker 2: Yes, absolutely, we're also going to be listening, I think,
[11:08] Speaker 2: to earnings from Kava they report on Tuesday as well.
[11:12] Speaker 2: Is this one affected do you think by the produce
[11:15] Speaker 2: scare that we've seen in fast food as opposed to
[11:17] Speaker 2: fast casual.
[11:19] Speaker 6: I mean, certainly anybody who touches lettuce is having a
[11:23] Speaker 6: rough summer, I will say that. So, yes, we focusing
[11:26] Speaker 6: on ticker c a VA. That's right, And so for analysts,
[11:32] Speaker 6: the earnings for Kava Group really need to show that
[11:35] Speaker 6: customer traffic, restaurant profits, and new store growth is remaining
[11:40] Speaker 6: strong despite these headwinds we're seeing, right with the cyclospara,
[11:45] Speaker 6: the parasite, and really understanding exactly what kind of slow
[11:49] Speaker 6: down the company is seeing as a result of all
[11:53] Speaker 6: of the headlines about food safety. In general, the stock
[11:58] Speaker 6: is up around thirteen percent this year, but down about
[12:01] Speaker 6: eleven percent this month, and when we put that in
[12:04] Speaker 6: comparison to names like Shakeshack, which is up about thirty
[12:08] Speaker 6: percent this month, Dominoes, which is up about seventeen percent
[12:11] Speaker 6: this month. Really, Kava, I think it could represent in
[12:16] Speaker 6: many respects close to the epicenter of this issue with cyclospora,
[12:21] Speaker 6: as it pertains to let us and produce as it
[12:24] Speaker 6: gets served in fast casual settings.
[12:27] Speaker 2: Yeah, oh so, we'll be watching for those hungry for
[12:29] Speaker 2: the earnings. Thank you, Judy, Judy LaGrue of Bloomberg News
[12:33] Speaker 2: with stocks to watch, Judy, thank you for this. Coming
[12:36] Speaker 2: up on Bloomberg day Break weekend, we'll examine the extent
[12:39] Speaker 2: of Europe's latest energy crisis. I'm Nathan Hager, and this
[12:43] Speaker 2: is Bloomberg. This is Bloomberg day Break Weekend, our global
[12:57] Speaker 2: look ahead at the top stories for investors in the
[12:59] Speaker 2: coming week. I'm Nathan Hager in Washington. Up later in
[13:02] Speaker 2: the program will look to a monetary policy decision from
[13:05] Speaker 2: the Reserve Bank of Australia. But first, in the coming days,
[13:08] Speaker 2: we hear from some of Europe's biggest energy companies about
[13:10] Speaker 2: their recent performance as reserves drop to new lows and
[13:14] Speaker 2: geopolitical unrest drives up prices. How are the major players responding,
[13:19] Speaker 2: let's head to London and bring in Bloomberg daybreak, europe
[13:21] Speaker 2: banker Caroline hepger Nathan.
[13:23] Speaker 3: European gas storage levels have fallen to their lowest for
[13:26] Speaker 3: this time of year in almost two decades, after the
[13:29] Speaker 3: war in the Middle East drove up prices and stalled
[13:32] Speaker 3: winter stockpiling. The situation has left governments with a growing
[13:36] Speaker 3: dilemma as colder weather approaches. At the start of this month,
[13:41] Speaker 3: European Union inventories were only just about fifty seven percent full. Meanwhile,
[13:47] Speaker 3: prices are still about eighty percent above pre war levels
[13:50] Speaker 3: and remain higher than winter contracts, leaving little incentive for
[13:54] Speaker 3: hoarding the fuel. And extreme temperatures are also a factor.
[13:59] Speaker 3: A series of blossering heat waves in the region has
[14:02] Speaker 3: weakened some of the most historically reliable sources of electricity,
[14:06] Speaker 3: forcing more dependence on imported fossil fuels and variable renewable
[14:11] Speaker 3: energy frances. Rather cooled nuclear power plants have suffered a
[14:15] Speaker 3: recuid amount of heat related outages. Emi Ashford is head
[14:20] Speaker 3: of Energy Structure, It's standard chartered bank, and says that
[14:23] Speaker 3: the sector is facing a particularly pertinent combination of challenges now.
[14:28] Speaker 7: Whether it's always mattered to the energy complex. It influences
[14:33] Speaker 7: fuel demand, but increasingly extreme heat and drought affect refiners'
[14:39] Speaker 7: ability to produce fuels efficiently, so we have simultaneous raising
[14:44] Speaker 7: of demand and constraint in supply. Each individual effect is
[14:49] Speaker 7: relatively small, but when you combine them, that amplifies pressure,
[14:52] Speaker 7: and we've particularly seen that on middle distillert cracks and
[14:56] Speaker 7: boosting of refinery margins over the summer month at the
[14:59] Speaker 7: ice Ga Brent crack that reflects European diesel pushed over
[15:04] Speaker 7: seventy five dollars at the end of July, a near
[15:06] Speaker 7: twenty year high, and there is still further upside possible
[15:09] Speaker 7: there if conditions worsen. And Europe is a particularly interesting
[15:14] Speaker 7: case for this because most European refineries were designed decades
[15:18] Speaker 7: ago for significantly cooler climates. And the limiting factor isn't
[15:23] Speaker 7: the dis column itself, but it's the cooling systems. As
[15:26] Speaker 7: we see ambient temperatures increasing, air coolers become less effective.
[15:31] Speaker 7: Cooling water sources like you mentioned, such as the rivers,
[15:34] Speaker 7: they warm, so they remove less heat, and there's an
[15:36] Speaker 7: increasing risk of refiners breaching water discharge temperature limits. And
[15:41] Speaker 7: we have operational safety limits which we can reduce runs
[15:44] Speaker 7: taking processing units offline.
[15:47] Speaker 3: That was Emily Ashford from Standard Chartered there speaking to
[15:50] Speaker 3: Bimberg's Lizzie Burden and Anna Edwards. So this is the
[15:54] Speaker 3: backdrop for earnings from utilities Eon and RWE and the
[15:59] Speaker 3: wind ter buying manufacturer Vestas that will get in the
[16:02] Speaker 3: next few days. Do mean now for more is Bloomberg's
[16:06] Speaker 3: Brussels Buia chief Suzan Lynch and our energy reporter Aim
[16:10] Speaker 3: and Fauhat Suzan. The energy crisis is affecting much of
[16:15] Speaker 3: the European continent. What has the response been like in Brussels.
[16:20] Speaker 8: Well, I think since the outset of the war in Iran,
[16:25] Speaker 8: European officials have been keen to stress that this is
[16:28] Speaker 8: not the same as a crisis that engulfed the European
[16:31] Speaker 8: Union back in twenty twenty two, following the full scale
[16:35] Speaker 8: invasion by Russia of Ukraine. Then we saw that big
[16:39] Speaker 8: energy spike. Things have not gone as high as we
[16:43] Speaker 8: have then. One reason the EU officials are keen to
[16:46] Speaker 8: stress is that Europe has diversified its supply. Now it's
[16:50] Speaker 8: not directly dependent on the Middle East for energy imports.
[16:54] Speaker 8: For example, it is more dependent on places like the
[16:58] Speaker 8: US Norway, although of course it is indirectly impacted by
[17:02] Speaker 8: what's happening in the Straitform moves and around that region.
[17:07] Speaker 3: Yeah, as you say, perhaps not too comparable to twenty
[17:10] Speaker 3: twenty two when Russia first invaded Ukraine. That was towards
[17:13] Speaker 3: the end of the COVID nineteen pandemic, wasn't it. But
[17:15] Speaker 3: then lay of that with the war in Iran. And
[17:18] Speaker 3: there are some issues, aren't there for the EU to
[17:22] Speaker 3: deal with? I mean, how do you think this place
[17:26] Speaker 3: into diplomacy between the EU and the US given this pressure.
[17:31] Speaker 8: Well, as part of the EU US trade deal that
[17:33] Speaker 8: was signed around a year ago between Arsena underlyon the
[17:36] Speaker 8: head of the European Commission, and Donald Trump at his
[17:39] Speaker 8: golf course in Scotland, a big part of that was
[17:43] Speaker 8: a commitment by Europe to buy around seven hundred and
[17:46] Speaker 8: fifty billion worth of US energy. Now we do know
[17:50] Speaker 8: that the Europeans have been buying a lot of LNG
[17:53] Speaker 8: from the US. Now, whether it's going to hit those figures,
[17:57] Speaker 8: how you measure that, that's a whole other question. But
[18:00] Speaker 8: that is certainly the case, and even in some quarters
[18:02] Speaker 8: there's been talked about, is the European Union building up dependency.
[18:06] Speaker 8: It's just got a rid of one dependency for Russia,
[18:08] Speaker 8: and here it is kind of opening up potentially your
[18:11] Speaker 8: dependency with the US at a time when of course
[18:13] Speaker 8: relations between the US and Europe are at low. It
[18:17] Speaker 8: has to be seen. But look, I'm not downplaying the
[18:19] Speaker 8: issue here for the European Union. The reality is that,
[18:22] Speaker 8: you know, the EU storage facilities have come to LNG.
[18:27] Speaker 8: The gas are very very low. It's around fifty seven
[18:30] Speaker 8: percent full. That's been the lowest in records going back
[18:33] Speaker 8: to around two thousand and nine. And we have seen
[18:36] Speaker 8: these LNG imports have been dropping since April because of
[18:40] Speaker 8: the disruption and supply. Now again the European Union is saying,
[18:44] Speaker 8: you know, not time to panic yet. It believes that
[18:48] Speaker 8: fresh import will offset and those lower levels of storage.
[18:53] Speaker 8: But undoubtedly it is an issue now as we get
[18:55] Speaker 8: into the winter months.
[18:58] Speaker 3: Yeah, it's already starts to turn even though it's August.
[19:01] Speaker 3: You can feel that the daylight hours are becoming shorter
[19:04] Speaker 3: in the UK at least. Really interesting, Suzan, thank you
[19:07] Speaker 3: so much. Yeah, for those thoughts then about Europe. How
[19:11] Speaker 3: Europe can try to ameliorate the energy situation after well
[19:15] Speaker 3: a series of crises really in overlaying crises. Thank you amen.
[19:19] Speaker 3: Let me turn to you then in terms of this
[19:23] Speaker 3: well what i'll call a multi layered problem, a recurring
[19:27] Speaker 3: problem of energy for Europe. What do you think there
[19:30] Speaker 3: is about this particular moment that is so very difficult
[19:33] Speaker 3: for the European energy market.
[19:35] Speaker 9: I mean, I think this, as we always say this,
[19:37] Speaker 9: a lot of it is about weather. I mean, we've
[19:38] Speaker 9: had now this extreme heat this summer. Definitely some of
[19:41] Speaker 9: it's predictable, you know, it's always hot in the summer,
[19:43] Speaker 9: but it has been quite prolonged, and just now all
[19:45] Speaker 9: these companies and all these different markets will be thinking
[19:48] Speaker 9: about getting ready for winter. And when you have that
[19:50] Speaker 9: kind of that winter looming with what's happening this summer,
[19:52] Speaker 9: with lots of energy supplies being used up because of
[19:54] Speaker 9: cooling demand, but also lots of issues with calling nuclear actors,
[19:58] Speaker 9: meaning we have to use more call and gas apply.
[20:00] Speaker 9: You know, it puts everyone in a bit of a
[20:01] Speaker 9: difficult position going into the coming months as we prepare
[20:04] Speaker 9: for those colder months ahead.
[20:06] Speaker 3: Yeah, Suzanne was just mentioning though it's not really a
[20:10] Speaker 3: crisis that you can compare to the invasion of Ukraine
[20:14] Speaker 3: when that sensed such a shock across Europe in terms
[20:17] Speaker 3: of the scale of this problem. Give us some idea
[20:20] Speaker 3: of how you're thinking about it.
[20:21] Speaker 9: Yeah, I mean, you're right, I think very quickly we
[20:23] Speaker 9: start trying to draw those parallels, and we're not in
[20:25] Speaker 9: the same position as we were back then. That being said,
[20:28] Speaker 9: we are starting to see some i'd say warning signs.
[20:30] Speaker 9: For example, when we look at some of the energy
[20:32] Speaker 9: futures energy prices, they are going up to levels that
[20:34] Speaker 9: we haven't seen since winter twenty twenty two. I think
[20:37] Speaker 9: you're a sorry about Italy actually this week, which is
[20:39] Speaker 9: very gas dependent, which just so one of their prices
[20:41] Speaker 9: go up to the highest since December twenty twenty two,
[20:43] Speaker 9: which is quite shocking. But we always say when it
[20:45] Speaker 9: comes to again to winter, which is really where these
[20:48] Speaker 9: effects are felt, it only takes, you know, a very
[20:50] Speaker 9: cold snap, a difficult month to very quickly be in
[20:54] Speaker 9: I'm not going to see the same position, but in
[20:55] Speaker 9: a very similar position as we were back then. So
[20:57] Speaker 9: although you're right, we're not there yet, everyone is very
[21:00] Speaker 9: aware that that could change very quickly depending on the
[21:02] Speaker 9: months ahead.
[21:03] Speaker 3: So how are energy providers dealing with that situation? And
[21:07] Speaker 3: as you say, are they therefore passing those price pressures
[21:10] Speaker 3: onto consumers?
[21:12] Speaker 9: Yeah, I mean when it comes to wholesale markets, as
[21:14] Speaker 9: I said, the prices have been elevated because of the
[21:16] Speaker 9: the around war, they are elevated because of the extreme
[21:19] Speaker 9: heat this summer and also because of gas storage issues.
[21:21] Speaker 9: Those prices do get passed on to consumers through their
[21:24] Speaker 9: bills in different mechanisms in different countries. It has to
[21:28] Speaker 9: be said that Europe has learned obviously since the last time.
[21:31] Speaker 9: We've built a lot more resilience, whether that be expanding
[21:33] Speaker 9: renewble energy, that be just kind of getting smarter about
[21:36] Speaker 9: how we run our gread at different times. That's something
[21:39] Speaker 9: that everyone is thinking about. But you know, again with
[21:41] Speaker 9: renewable energy, there are lots of things that can affect that,
[21:44] Speaker 9: whether there's less wind for a period of time, So
[21:46] Speaker 9: it still creates vulnerabilities and there's no kind of golden bullet,
[21:49] Speaker 9: but it's just about trying to mitigate every ventrality that
[21:52] Speaker 9: could lead to those difficult times.
[21:54] Speaker 3: Okay, in the next few days, we've got earnings from
[21:56] Speaker 3: some major companies, utilities, businesses in Europe from Eon, our
[22:02] Speaker 3: we also vest us. What are we expecting in terms
[22:05] Speaker 3: of Eon and RWE earnings and will some of these
[22:09] Speaker 3: themes be evident in their reports?
[22:12] Speaker 9: Yeah, I mean, I think these these companies operate across
[22:14] Speaker 9: different parts of the energy landscape. I mean, Eon, they
[22:17] Speaker 9: do lots in the grid space, and grids have been
[22:19] Speaker 9: really important this summer as far as resilience goes, making
[22:21] Speaker 9: sure that energy can be kind of brought from different
[22:23] Speaker 9: parts of the country. So it's very much going to
[22:25] Speaker 9: be kind of an investment picture there about you know,
[22:28] Speaker 9: the whole story we've been having about upgrading grids, being
[22:30] Speaker 9: able to carry that wind energy from the north to
[22:32] Speaker 9: the south in Germany, et cetera. I think Our we similar.
[22:38] Speaker 9: They're obviously a bit more, a bit more impacted in
[22:41] Speaker 9: the kind of renewable spaces. They're also building their own
[22:44] Speaker 9: projects in different jurisdictions, you know, bidding for products in
[22:47] Speaker 9: the UK and elsewhere, So for them it'll also be
[22:49] Speaker 9: about that investment picture. We have had a difficult few
[22:52] Speaker 9: years for offshore wind, something that we keep talking about,
[22:54] Speaker 9: and those cost pressures are still there. But at the
[22:57] Speaker 9: same time, you know, when energy prices go up elsewhere
[22:59] Speaker 9: because of geopolitical things, wind does start becoming more interesting
[23:02] Speaker 9: as well. So there's kind of an investment case there
[23:04] Speaker 9: to think about and see how these companies react to that.
[23:08] Speaker 3: What about VESTA US again with the exposure to the US,
[23:11] Speaker 3: so that's been in focus in the past.
[23:13] Speaker 9: Yeah, I mean the US has been a difficult market
[23:15] Speaker 9: for offshore win recently because of the actions of Trump there.
[23:19] Speaker 9: That being said, Vestas has already kind of done a
[23:20] Speaker 9: lot of what they have to do there as far
[23:22] Speaker 9: as kind of pulling back. They'll be focusing on other projects.
[23:25] Speaker 9: And again it's again that investment picture about where they
[23:28] Speaker 9: start putting their capital next. They know, they've also been
[23:30] Speaker 9: looking at the different kinds of kind of M and
[23:33] Speaker 9: A and stuff like that. But I think it's important
[23:35] Speaker 9: also to note that although when we talk about the
[23:37] Speaker 9: US and kind of renewables more generally someonoys we talk
[23:40] Speaker 9: about being kind of a difficult environment, there are still
[23:42] Speaker 9: opportunities there in all these companies. When I talk to
[23:44] Speaker 9: them about the US market, they're still very interested. They're
[23:47] Speaker 9: still looking at projects there. So there are still opportunities
[23:49] Speaker 9: there for these firms.
[23:50] Speaker 3: Okay, in terms of the EU. Suzanne talked a lot
[23:55] Speaker 3: about the different meetings that are taking place about how
[23:59] Speaker 3: at a policy level that EU tries to deal with this.
[24:02] Speaker 3: I mean, what is your take on that As you
[24:04] Speaker 3: focus a lot on businesses, investment and companies, what's their
[24:08] Speaker 3: perspective on how Europe is managing, as I say, a
[24:12] Speaker 3: kind of recurring issue around energy.
[24:14] Speaker 9: Yeah, I mean, I think it's interesting because this has
[24:16] Speaker 9: happened now a few times recently. It says this is
[24:19] Speaker 9: a recurring issue, and it does seem like the from
[24:21] Speaker 9: a policy perspective, things do seem quite slow. It's all
[24:24] Speaker 9: about you know, building more alt renewable energy, you know,
[24:26] Speaker 9: getting this kind of resilience, but that doesn't feed through
[24:29] Speaker 9: to consumers so quickly. Consumers are kind of all businesses
[24:32] Speaker 9: as well are seeing that difficulty in the coming kind
[24:34] Speaker 9: of three months, you know, the coming six months, whilst
[24:36] Speaker 9: the plans to kind of reach these big net zero
[24:39] Speaker 9: goals and not be dependent on gas are more like
[24:41] Speaker 9: three to five year time horizons. So that's something that
[24:44] Speaker 9: I think is difficult because you know it will pay
[24:46] Speaker 9: off at some point, but the payoff isn't soon enough,
[24:48] Speaker 9: and people are feeling the pain that I guess you
[24:51] Speaker 9: can say they have learned from what it happened twenty
[24:53] Speaker 9: twenty two, and there are kind of shorter term solutions,
[24:56] Speaker 9: but at the end of the day, it's more about
[24:58] Speaker 9: building that kind of system resilience which takes longer, which
[25:01] Speaker 9: only feeds through after a while, and hoping that populations
[25:03] Speaker 9: kind of you know, battle through that difficult period for
[25:06] Speaker 9: the time being.
[25:06] Speaker 3: Yeah, dealing with voted dissatisfaction about something that affects them,
[25:10] Speaker 3: you know, at the sharp end. So much, Aimon, thank
[25:12] Speaker 3: you so much for being with me. My thanks to
[25:14] Speaker 3: Bloomberg's Aiman Farhat and also to Suzanne Lynch. And we
[25:18] Speaker 3: will bring you full coverage of the earnings film vestas
[25:21] Speaker 3: Ian andr We in the coming week across Bloomberg platforms.
[25:26] Speaker 3: I'm Caroline Hepgar Here in London. You can catch us
[25:28] Speaker 3: every weekday morning for Bloomberg Daybreak you at beginning at
[25:31] Speaker 3: six am in London, that's one am on Wall Street.
[25:34] Speaker 2: Nathan, Thanks Caroline, and coming up on Bloomberg day Break weekend,
[25:38] Speaker 2: we look to a raat decision from the Reserve Bank
[25:40] Speaker 2: of Australia. I'm Nathan Hager, and this is Bloomberg. This
[25:55] Speaker 2: is Bloomberg day Break weekend, our global look ahead at
[25:58] Speaker 2: the top stories for investors in the coming week. I'm
[26:00] Speaker 2: Nathan Hager in Washington. This week we get a rate
[26:03] Speaker 2: decision from the RBA, the Reserve Bank of Australia. For
[26:06] Speaker 2: a preview, let's get to Doug Prisner, host of the
[26:09] Speaker 2: Bloomberg Daybreak Asia podcast.
[26:11] Speaker 4: Thanks Nathan. The Reserve Bank of Australia raised its policy
[26:15] Speaker 4: rate at each of the bank's first three meetings of
[26:18] Speaker 4: the year. Now in June, policymakers held steady To help
[26:21] Speaker 4: us understand the current dynamics of the Australian economy and
[26:25] Speaker 4: what the RBA may do next. I'm joined by Bloomberg
[26:28] Speaker 4: economist James McIntyre, who covers Australia and New Zealand. James
[26:33] Speaker 4: joins from our studios in Sydney. Thank you so much
[26:36] Speaker 4: for being here. Can we begin by setting the stage
[26:39] Speaker 4: with the story on inflation. I believe the latest reading
[26:43] Speaker 4: was a bit cooler than expected. Help me understand what's
[26:46] Speaker 4: going on.
[26:46] Speaker 10: So what we had was we got the June data
[26:49] Speaker 10: and that also gave us the quarterly data and Australia
[26:52] Speaker 10: is still in this bit of a situation. Where we've
[26:54] Speaker 10: got a new monthly CPI and that's slowly gradually taking
[26:59] Speaker 10: over from the quarterly which the RBA looked at, and
[27:02] Speaker 10: whether it's the monthly or the quarterly number, at the
[27:04] Speaker 10: end of the day that the latest figures that we
[27:07] Speaker 10: got were a little bit softer than the market, but
[27:09] Speaker 10: more importantly a little bit softer than what the RBA
[27:12] Speaker 10: was expecting. They raised rates at their May meeting and
[27:15] Speaker 10: put out a set of updated projections, which is the
[27:19] Speaker 10: basis for why they wanted to raise rates, and inflation
[27:22] Speaker 10: has come in not as hot, and so the three
[27:24] Speaker 10: rate hikes that the RBA delivered over the course of
[27:27] Speaker 10: this year to try and help slay that inflation dragon, well,
[27:30] Speaker 10: it turns out that the dragon, at least in the
[27:33] Speaker 10: data so far, isn't as big as the Central Bank
[27:36] Speaker 10: had initially thought.
[27:37] Speaker 4: When you look at the work that you do and
[27:39] Speaker 4: trying to understand the various data points, do you think
[27:42] Speaker 4: this is a durable trend will at last?
[27:44] Speaker 10: It's always an evolving picture. And one of the pieces
[27:46] Speaker 10: of the puzzle that's evolving increasingly that might help things
[27:50] Speaker 10: endure and last on the inflation front is the housing
[27:54] Speaker 10: market downturn. And the consumer and domestic demand side of
[27:57] Speaker 10: the economy. It's what we've said since those rate hikes,
[28:01] Speaker 10: and we've had not just those rate hikes, but we've
[28:04] Speaker 10: had the shock from the conflict with Iran, and then
[28:07] Speaker 10: some policy changes around the taxation of property in the
[28:11] Speaker 10: recent federal budget, and the three of those factors have
[28:14] Speaker 10: combined to deliver pretty sharp downturn in the housing market,
[28:19] Speaker 10: where people buyers have really pulled back and are sitting
[28:23] Speaker 10: on their hands.
[28:25] Speaker 4: So, if there has been this contraction in consumers spending,
[28:28] Speaker 4: what do you think it's going to take to reverse that?
[28:31] Speaker 4: Is the recipe here necessarily lower interest rates or does
[28:35] Speaker 4: something else have to change? Do you think we do have.
[28:38] Speaker 10: A situation where the labor market is not generating enough
[28:42] Speaker 10: jobs That we did have strong jobs in the most
[28:45] Speaker 10: recent month, but if we take a bit of a
[28:47] Speaker 10: longer arc over the year, we do have a softening
[28:50] Speaker 10: of labor market capacity. It might not, especially for the
[28:53] Speaker 10: property market and where the fears are for consumers right now,
[28:58] Speaker 10: it might not be that rate cuts and necessary. It
[29:01] Speaker 10: could be that we could see a little bit of
[29:02] Speaker 10: a stabilization within that. If there was a signal from
[29:06] Speaker 10: the RBA that they're likely to be on hold from here.
[29:10] Speaker 10: That would be a big relief to households and could
[29:13] Speaker 10: be something that could help catch what is currently a
[29:16] Speaker 10: bit of a downturn and help stave that off. But
[29:19] Speaker 10: it's unlikely that the RBA is going to be doing
[29:22] Speaker 10: that with inflation where it is. Inflation has been weaker
[29:26] Speaker 10: than expected, but it's still above their target, and so
[29:28] Speaker 10: they're likely to sound a little bit hawkish we think
[29:32] Speaker 10: at this August meeting, but softening their tone perhaps over
[29:36] Speaker 10: the meetings to come towards the end of the year.
[29:39] Speaker 4: Not a day goes by when there is not major
[29:41] Speaker 4: news as it relates to artificial intelligence. And I was
[29:44] Speaker 4: reading a piece that you sent. This is concerning the
[29:48] Speaker 4: RBA's chief economist, Sarah Hunter, who was warning that data
[29:51] Speaker 4: center boom maybe adding to pressures in the construction industry
[29:55] Speaker 4: by essentially taking workers away from other projects. Talk to
[30:00] Speaker 4: me a little bit about that and the level of
[30:02] Speaker 4: skilled labor that is available to tackle these kind of
[30:06] Speaker 4: construction projects.
[30:07] Speaker 10: So Australia has a very big infrastructure boom in one
[30:11] Speaker 10: of the second largest state and also in the largest
[30:14] Speaker 10: state in New South Wales, but in Victoria, there is
[30:16] Speaker 10: a major infrastructure boom as they roll out a lot
[30:20] Speaker 10: of civil construction for infrastructure in that state, and that's
[30:24] Speaker 10: something that has been a challenge for the residential construction
[30:29] Speaker 10: sector in order to get enough skilled trades people to
[30:33] Speaker 10: build the homes that are needed for the migration story
[30:36] Speaker 10: in the population picture or the strong population growth that
[30:40] Speaker 10: Australia tends to have thanks to migration. So we need
[30:43] Speaker 10: the housing, we need the construction workers for that.
[30:46] Speaker 2: We've got a very big.
[30:47] Speaker 10: Infrastructure construction boom around transport infrastructure. We're just putting the
[30:51] Speaker 10: finishing touches on a second airport for Sydney and a
[30:54] Speaker 10: lot of infrastructure around that. So the construction sector is
[30:57] Speaker 10: operating at capacity. And then when we think about that picture,
[31:02] Speaker 10: then there is this very large positive demand shock into
[31:05] Speaker 10: the economy from AI and the construction of the data centers,
[31:09] Speaker 10: and so this is something that is it's catching the
[31:12] Speaker 10: Reserve Bank's i quite obviously and quite importantly because you
[31:15] Speaker 10: know hyperscalers. If we look at what's been happening with
[31:18] Speaker 10: the price of be It processing chips and then memory chips,
[31:23] Speaker 10: the price of the iPhone is going to go up
[31:25] Speaker 10: because the hyperscalers are bidding up for all of these
[31:27] Speaker 10: scarce resources from the chip makers.
[31:29] Speaker 4: So broadly speaking, would you say that the build out
[31:32] Speaker 4: that we're seeing in Australia of these AI data centers
[31:35] Speaker 4: is that a positive for overall GDP?
[31:38] Speaker 10: It is in the construction sense, but we do see
[31:41] Speaker 10: a lot of this GDP the data center boom, if
[31:44] Speaker 10: you want to call it that. There's two elements. There's
[31:47] Speaker 10: the machines that you put into the data center, and
[31:50] Speaker 10: there's the building of the data center. The building that's
[31:52] Speaker 10: a boom for the economy, the machines that go in,
[31:55] Speaker 10: or that boom just goes straight out the import side
[31:58] Speaker 10: of the GDP calculation. That's a boom that's made in
[32:02] Speaker 10: South Korea, that's made in Taiwan, And if we look
[32:05] Speaker 10: at our balance of payments and our trade figures on
[32:08] Speaker 10: a monthly basis, you can definitely see that that's where
[32:11] Speaker 10: that side of the boom is showing up. But on
[32:13] Speaker 10: the construction side, yes, it's definitely something that is delivering
[32:17] Speaker 10: an extra boost to GDP and that's a positive in
[32:20] Speaker 10: the overall picture for the economy, given that that housing downturn,
[32:24] Speaker 10: the three rate hikes that's seeing some of the softness
[32:27] Speaker 10: coming through on the consumer side of things.
[32:30] Speaker 4: You mentioned the softness of the housing market a moment ago,
[32:32] Speaker 4: and I'm wondering whether or not there is a positive
[32:35] Speaker 4: side to that story, something that we need to tease
[32:38] Speaker 4: out a little bit more, especially where the issue of
[32:41] Speaker 4: affordability comes into play.
[32:43] Speaker 10: For a long time there has been significant challenges and
[32:46] Speaker 10: a lot of hand ringing and concern by policymakers about
[32:49] Speaker 10: how to address the affordability challenge within the housing sector.
[32:54] Speaker 10: House prices are easing back a touch, interest rates are high.
[32:58] Speaker 10: High interest rates don't help audability, But we do have
[33:01] Speaker 10: a situation of house prices coming off slightly, inflation continuing
[33:06] Speaker 10: to rise, wages continuing to rise as well, so real
[33:10] Speaker 10: house prices are in decline, real wages are gradually creeping higher.
[33:14] Speaker 10: There is a positive there that once we do get
[33:17] Speaker 10: some potential clear signs that the inflation challenge is over
[33:23] Speaker 10: and that dragon slightly smaller dragon is actually slain, and
[33:28] Speaker 10: the Reserve Bank can think about normalizing monitory policy and
[33:31] Speaker 10: bringing it back from where it is back towards a
[33:33] Speaker 10: more neutral setting, that we will see that it will
[33:37] Speaker 10: become quite clear that this maybe has set up some
[33:40] Speaker 10: of the perhaps early next year or in twenty twenty eight,
[33:44] Speaker 10: has set up some of the most beneficial or positive
[33:47] Speaker 10: housing affordability conditions that Australians might have seen in the
[33:50] Speaker 10: last ten, fifteen, or maybe even twenty years.
[33:53] Speaker 4: You mentioned the immigration issue a moment ago, and I'm
[33:55] Speaker 4: trying to get a sense of what's happening in that
[33:57] Speaker 4: dynamic right now and whether or not the government believes
[34:01] Speaker 4: that it's important to kind of control the flow of
[34:05] Speaker 4: migrants coming into the country, or whether there is the
[34:08] Speaker 4: realization that in order for the economy to expand further,
[34:12] Speaker 4: that an influx of migrants is really necessary.
[34:16] Speaker 10: Well, Doug, Look, this is a key tension point within
[34:20] Speaker 10: the economy and also within within domestic politics. The migration
[34:24] Speaker 10: story has been part of what's kept Australia's economy growing
[34:27] Speaker 10: over the last couple of years. Per capita GDP growth
[34:30] Speaker 10: this week, and we've had cost of living pressures that's
[34:34] Speaker 10: been a kind of a cover for what's gone on
[34:37] Speaker 10: within the economy in terms of living standards not really
[34:40] Speaker 10: moving anywhere GDP per capita being in recession and flatlining
[34:44] Speaker 10: for some point in time, and that's a different scenario
[34:47] Speaker 10: to what voters and the community expects and has been
[34:50] Speaker 10: used to over our history, and it's sort of natural
[34:53] Speaker 10: that people gravitate towards, you know, people that are offering
[34:58] Speaker 10: or at least calling out not what they're feeling, and
[35:01] Speaker 10: so Australia does have that challenge. Politically, there is the
[35:05] Speaker 10: emergence of a group similar to what we've seen with
[35:09] Speaker 10: the MAGA and then UK Reform within the One Nation
[35:14] Speaker 10: Party within Australia having quite a big anti immigration type stance,
[35:19] Speaker 10: and that has been their polling has really risen quite
[35:22] Speaker 10: quite a bit and putting a lot of pressure on
[35:24] Speaker 10: the government and the main opposition party around what to
[35:28] Speaker 10: do about limiting migration in the sense that that being
[35:33] Speaker 10: something that has captured people's imaginations as a possible solution. Now, really,
[35:38] Speaker 10: when we think about Australia and Australia's economy continues to
[35:43] Speaker 10: have such abundant opportunities ahead of it, and we do
[35:45] Speaker 10: need labor to come in and help us unlock some
[35:48] Speaker 10: of those potential and possibilities. But what we haven't seen
[35:52] Speaker 10: and over the last couple of years, is we haven't
[35:55] Speaker 10: seen the benefit of improvements in living standards coming along
[36:00] Speaker 10: with the growth in the economy, and so you know
[36:04] Speaker 10: that's where this party has come up and the support
[36:07] Speaker 10: for around this anti migration story has really come through.
[36:13] Speaker 10: There are some signs though that if we do get
[36:16] Speaker 10: an improvement in living standards and a pick from improved
[36:21] Speaker 10: productivity growth as the government's roll out of or the
[36:26] Speaker 10: funding for big social programs by the government is curtailed
[36:31] Speaker 10: somewhat freeing up some room for the private sector it
[36:34] Speaker 10: potentially through the productivity enhancing benefits coming through from the
[36:38] Speaker 10: AI Data Center boom, and then the economy economic opportunities
[36:43] Speaker 10: that might evolve after that. These are things that will
[36:46] Speaker 10: come over time in the pipeline, but for the moment,
[36:49] Speaker 10: it is delivering this significant pressure on migration, and so
[36:54] Speaker 10: we have seen that the government put in a lot
[36:57] Speaker 10: of policies to try and wind that back. There haven't
[37:00] Speaker 10: been seeing much signs of success at the headline level,
[37:04] Speaker 10: but we're seeing some signs coming through in some of
[37:07] Speaker 10: the more high frequency data, especially around student visas and
[37:10] Speaker 10: the like, that some of the pressure might be coming
[37:13] Speaker 10: off soon.
[37:14] Speaker 4: So as we wrap up, I just want to get
[37:16] Speaker 4: back to the RBA meeting just to underscore the fact
[37:19] Speaker 4: that the latest reading on inflation was on the soft side.
[37:24] Speaker 4: We hear, or I hear at any rate, the fact
[37:27] Speaker 4: that the labor market is stable at best. There are
[37:30] Speaker 4: some problems that are maybe being addressed. Do we have
[37:33] Speaker 4: any guidance right now, at least from what the markets
[37:36] Speaker 4: are seeing the money markets, in particular on what the
[37:39] Speaker 4: RBA may do at the next meeting.
[37:42] Speaker 10: Market expectations for the RBA have been dialed back a
[37:46] Speaker 10: bit over the last especially following that inflation data. There's
[37:50] Speaker 10: still an indication that markets are expecting perhaps a little
[37:54] Speaker 10: bit more tightening, but a full hike not being fully
[37:57] Speaker 10: priced in right now. But the situation is one where
[38:01] Speaker 10: is a full rate hok is not priced in right
[38:04] Speaker 10: now by markets. So there's still I guess, dipping the
[38:07] Speaker 10: toe in the water or lukewarm support for further tightening
[38:10] Speaker 10: with markets not expecting that the RBA is going to
[38:13] Speaker 10: be easing back anytime soon.
[38:14] Speaker 4: We really covered a lot of ground and I appreciate
[38:17] Speaker 4: it so much. Bloomberg economist did James McIntyre helping us
[38:20] Speaker 4: understand what's happening on the ground in Australia. James covers
[38:24] Speaker 4: the economies of Australia and New Zealand for Bloomberg Intelligence.
[38:29] Speaker 4: Joining from our studios in Sydney, I'm Doug Chrisner. You
[38:32] Speaker 4: can catch us weekdays for the Daybreak Asia podcast. It's
[38:35] Speaker 4: available wherever you get your podcast.
[38:38] Speaker 2: Nathan, Thanks Doug, and that does it for this edition
[38:41] Speaker 2: of Bloomberg Daybreak Weekend. Join us again Monday morning at
[38:44] Speaker 2: five am Wall Street Time for the latest DOUN, markets
[38:46] Speaker 2: overseas and the news you need to start your day.
[38:49] Speaker 2: I'm Nathan Hager. Stay with us. Top stories and global
[38:53] Speaker 2: business headlines are coming up right now.

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