Higher as inflation data fuel hopes for a soft landing for the u. S. Economy. The bank of japan holds and unscheduled bond buying operation. Manufacturing contracting for a fourth straight month in another that the economy is failing to find traction. Youll kashkari says the u. S. Inflation outlook is positive but warns higher Interest Rates could still see some job losses. Christine lagarde says the ecb could hike again even after a pause next time. Happy monday. The start of a new week. And the end of the month. August and september tend to be if you look at history some of the worst two months for the s p 500. Strategists are asking, is it time to brace for a selloff . U. S. Equity futures pointing to a lower opening. As for treasuries, the question that lingers from friday is whether japanese investors will rush home in pursuit of highyield out that the bank of japan has tweeted its program. The japanese are some of the biggest investors and buyers of u. S. Debt so will treasuries join less foreign demand. I on friday japanese stocks having a great session this morning. More on that in a moment. Closer to home at the question remains, are the ecb and the fed done with hiking . We have a bank of england decision on thursday. Another big week for earnings. Almost as busy as last week. We have 169 Companies Reporting. We will bring you the latest breaking earnings. Heineken reporting for the first half. A week of print from the dutch beer giant. Firsthalf revenue missing estimates as expected. We have volumes down. The estimate was for three point 15 of a drop. Per staff revenue is up. The estimate a missed there as well. The full year outlook has been updated. Have a deeper look. Heineken facing mounting challenges in some of its most important markets like vietnam and nigeria. There have been questions over whether it would reach its full your targets and that depends on how its premier brand cells. Sells. We will bring you an interview with the ceo on markets today at 7 40 u. K. Time. Lets get back to how asia markets are faring. What is happening where you are. Good morning. Asian markets starting off the week with a bang. Starting with china. Manufacturing pmi beating estimates but still the fourth month of contraction. I think traders are looking at the data through rose tinted glasses. The shares are moving higher. There is more optimism in hopes of a stimulus coming through as we get weaker Economic Data coming out today. There has been more of a drip feed of measures such as the consumption benefits they are talking about in a few hours. There are potential reports that there may be more local level property measures coming out to support the ailing economy. More optimism coming back into the market which is a turn from before. And there is a lot of under waiting positions. Any sort of move back into shares on shore could move markets and bring the momentum back in. In japan, very much in the green. Morgan stanley and Goldman Sachs saying, by now. Traders are trying to address the news and understand what is the definition of flexible and nimble i the bank of japan. Yields on the jgb tenure moving 10year moving. That is weighing on the yen. A lot to see and i just before we can understand this path a lot to see and digest before we can understand this path. Host sticking with the china topic with our roundtable. I am joined by mallory and jill. Lets start with the china pmis. Manufacturing has contracted for a fourth month. No Manufacturing Activity as the economy is still under pressure. This is the backdrop to the government measures. What drove this week data . What do you expect from the announcement . Youre looking at continued evidence of the slowdown we have been talking about. Even though the Manufacturing Index picked up. It still remains in contractionary territory for a fourth month. It is also the nonmanufacturing gauge measuring the Services Sector activities. It stayed in the expansionary territory but it is slower than what economists thought it would be. It shows a continued loss of momentum. The data is backwards looking. In july, we got the announcement from the paula world we are progrowth from the college politboro, we are progrowth. We have seen a little bit of a hint from the Reform Commission this morning about what we may be expecting including some initiatives. It the government will remove restrictions on car purchase limits. It is not really the big stimulus that investors have been waiting for from this government. Lizzy investors waiting with bated breath for meaningful intervention. We have data from japan. What are you watching in particular after fridays boj announcement . We are slowly going to understand more about the bojs reaction function. They came in this morning with a bond buying operation with yields moving five basis points higher. It is dragging up treasury yields as well. It is one big risk on the horizon. If the bank of japan lets the yields rise slowly, maybe dampens relative dampens volatility on the way to 1 . Lizzy we have heard from Neel Kashkari after the latest u. S. Data. He is upbeat on inflation and the chance of the u. S. Avoiding a recession but he says there will be job losses and slower growth. Overall i think the inflation outlook is positive. It should be slowly diminishing from here. We continue to be surprised by the dynamics of the reopening economy. We have to let the data guide us. Lizzy jobs numbers on friday, what are you looking at . The big print of the week is the nfp number on friday. It feels like from what the market is expecting we wont get it this month. Jobless claims holding extremely well the summer. Strong summer seasonals still helping the job market. It might not be until the beginning of the fall that we see weakness. Kashkari repeating the words of powell that we are likely to see some labor marker labor market weakness soon. Lizzy rarely does the fed managed to pull off a soft landing. It is time to worry about is it time to worry about the s p 500 . It is important to keep in mind some nuanced numbers. Indicators point to a soft landing. Joe davis, a chief economist at vanguard. He was talking about even if you get what you want out of this, to reach the fed target of 2 inflation, it will require an uptick in employment. Even if you just have an uptick of 100 basis points, you potentially get some recession warning trends flashing. I would also point out that Bloomberg Economics the other day was assessing this saying if you look at the good data, there are some underlying metrics that indicate some cracks in the u. S. Economy. Looking at some of the inflationary concerns and those types of reports. There is a lot of nuance you have to bake in. The fed still has to watch a lot of the indicators moving forward. Lizzy lets have a look at some of the data we are keeping an eye on in europe. 9 30 a. M. , we get an insight into the health of the u. K. Housing market. The economy expects another drop in mortgage lending approvals. You will likely see it in this data, the house price correction is thought to have further to go. At 10 00, we have euro area secondquarter gdp which is expected to be anemic. Though an improvement on the stagflation from the first quarter. And stronger than expected growth we have seen from france and ireland. Also at 10 00 london time we get euro area cpi. Core inflation unchanged at 5. 5 . We already saw on friday german and french inflation slowing to their lowest annual rates since the invasion of ukraine. On friday markets paired back to another ecb hike. There are concerns about domestically generated inflation. I head of the next decision, how much more focused is are going to be on the jobs data . Todays inflation print is one of the big ones of the week. Remember, we do have another inflation print before the ecb convenes again after the fall. Maybe not a huge market reactions to the prints. But with the ecb turning off autopilot making us more sensitive to data, may be a surprise in the core number could see a bundt rally. We still have one more cpi print to go before they meet again. Lizzy thank you to valerie and jill easing us into our monday morning. You can get a round up of the stories you need in todays edition of daybreak. The lead on china pmis and stimulus measures as discussed. They also have Christine Lagarde saying the ecb could also could always hike again. If Financial Times reported that blackstones Real Estate Trust has sold over 10 million in assets as it prepares to pivot to ai. You can go to da why be go on your bloomberg terminal. Coming up, more volatility likely lies ahead. We look at this weeks rate decisions from the reserve bank of australia and the bank of england. And we also discussed stress tests for banks. We speak to the European Banking Authority chairman. Stay with us. This is bloomberg. It is certainly possible that we would raise funds again it a september meeting the data warranted it. We have an open mind as to what the decisions will be in september and subsequent meetings. I want to stress that the decision today to tweak the ycc is not a step towards normalization. The aim is to enhance the sustainability of the monetary easing. Lizzy jerome powell, Christine Lagarde and others speaking about the policy announcements last week which was the focus for global markets. More volatility likely lies ahead. More decisions from the rba and the bank of england this week as well as key reports from u. S. Manufacturing and jobs. We are joined by Garfield Reynolds to take us through what we have coming up. We have been discussing the market fallout from friday. What lies ahead for gdbs in the end jgbs in the end . For the first time, in a lot of ways, no one is quite sure where the bank of japans tolerance levels are good on the one hand it seems quite aggressive. They came in today to hold down yields about after they jumped again but they are still only 10 basis points above the previous target. On the other hand, the two day yield the two day move in yield is the most since april. And arguably without the boj stepping in it would be considerably more. Jgbs face an uncertain outlook and a lot more volatility as we find out where are the tolerance levels as far as the boj is concerned. What does it think nimble operations means . And what is the fallout for the global bond market . There is plenty of concern that higher jgb yields would bring money back into japan and away from overseas where japanese investors hold about 2 trillion or more worth of foreign bonds. As for the yen, so far the bojs apparent efforts in keeping something of a lid on yields are proving to be a downer for the yen. That is the two sides of the equation. If jgb yields takeoff, that would be seen as the boj winking at a normalization which was not what he was doing he said but normalization meaning heading away from quantitative easing rapidly and moving away from ultra easy policy. We saw strong gains with rumors of the bojs shift came out before the boj met. Today we have a continuation of those strong declines we saw breakout on the yen on friday to take it back to where it had been before the rumors came out. If you keep a lid on jgb yields that is bad for the yen because the trip back towards a world where Japanese Central bank policy is close to what the you close to what the world is doing, that is what the yen needs to recover from the weak levels on a historical basis. Lizzy we were talking about chinese pmis. Tonya said investors are looking at them with rose tinted spectacles. Stocks are pretty relieved this morning. They are but they have become less relieved as the day has gone on. You always have to be cautious about reading too much into a bit of a bounce in chinas stocks. You were talking before about the s p being 5 short of regaining its record high which came in in 2020 two. The chinese stock market is 30 below its most recent peak and the peak came in early 2021. A market that is that far down and has been that far down for that long, it does not take a lot to spark what looks like an impressive move. Chinese stocks are up 1 now but, over the last year they kept on coming down and down. So they are cheap. They are cheap for a reason but they are cheap. That gives a possibility for every little hint that somehow the chinese authorities are going to come up with the right levers to undo some of the damage that to some extent has been delivered by the chinese authorities to the outlook of chinese economies Chinese Companies and their investment outlook. Finding something sustainable requires coming up with something that would convince investors that this time is different. Lizzy we keep an eye on the policy announcement later. The aussie dollar is also in the spotlight ahead of tomorrows rba decision. What are traders expecting . Traders are expecting strongly that the rba will hold policy at four point 1 . There is a 75 chance for that. The majority of economists are forecasting a hike. That gives that gives us a chance for volatility. If there is a hike, you will get a jump in the aussie dollar. If it holds you will have a constituency saying the rba is done and it will call time on rate hikes for just about anybody else except for new zealand. In the short term at least you could say the aussie pop if the rba does raise, the pop will have trouble sustaining because he will also have a tendency for traders and economists to say the rba did the rate hike and that might be it. We expect them to do one more hike and they have. Time to call it a day. Lizzy thank you to bloomberg mliv strategist Garfield Reynolds. Time to call it a day on that conversation for now. Coming up, western leaders say they are ready to use force to restore democracy in niger after last weeks coup. More on that developing story. This is bloomberg. Lizzy welcome back. West African Leaders say they are ready to use force to restore democracy in new sheriff necessary. A massive rally in support of coup leaders marched on the French Embassy. What do we know about the nations new military leader . There is still a lot we are learning about this new leader. He is a long army leader. What is most important is he has been a leader of the president ial guard since 2011. He was appointed by the former president who was a close ally of the west. He stayed on with this new president. For many people it caught them off guard it he was doing Something Like this. What we heard from his speech last week is he was concerned about the security situation in the country and also governance. The question is is he the right person to lead the country forward and what this means for the international community. Speaking of that community, over the weekend we saw a lot of responses as you mentioned. They were looking we are looking at pictures of our rally that happened towards the French Embassy in niger. We heard the eu, the u. K. And france suspending Development Aid to this country. This country has received 2 billion in international aid. This is a concern for the international community. The strategic importance of niger for uranium and also because it is critical in the fight against jihadists in the region. This is a region that has already fallen victim to a number of twos coups. We will hear from more International Leaders including the u. S. Which has not yet pulled out developmental age. Lizzy thank you to bloombergs jennifer with the update on africa. Lets check in on the markets. We have a picture of the futures. Asian equities rallying especially in china. Euro stoxx 50 futures in the green. Looking ahead to the wall street open, s p and nasdaq futures pointing to a sleepovers just arent what they used to be. A house full of screens . Basically no hiccups . You guys have no idea how good youve got it. How old are you . Like, 80 . Back in my day, it was scary stories and flashlights. We dont get scared. Oh, really . Mom can see your search history. 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Golo is real and when you take release and follow the plan, it works. Lizzy good morning. These are the stories you are waking up to. Asia stocks follow wall street higher after inflation data fuel hopes for a soft landing for the u. S. Economy. The bank of japan holds an unscheduled bond buying session. Chinas Services Sector slows further than expected in another sign that the economy is failing to find traction. Neel kashkari says the u. S. Inflation outlook is positive but warns higher inflation rates could still see some job losses. Christine lagarde says the ecb could hike again even after a pause time. Another big week for earnings. Almost as busy as last week. 169 Companies Reporting on the s p 500 and 87 on the stoxx 600. Out of austria we have the biggest bank in central and eastern europe. You have its capital ratio coming in at 14. 9 , beating the estimate of 14. 3 . Ecb rate hikes were expected to boost its record Net Interest Income even more in the second quarter. Loan loss provisions were expected to stay muted. We will stay on top of the breaking headlines for you. We have an interview with the cfo in a few minutes. Or broadly and markets as we approach the end of the month, the s p 500 is on track for its fifth straight month in the green. August and september do tend to be at its worst