I am dani burger along sign jeb bush alongside jennifer zabasajja. Fresh data shows the Services Sector in china was as low as rates this year is in august. Bloomberg economics says china may never overtake the u. S. As the worlds biggest economy. Lying low. Philip lowe the governor of the rba these Interest Rates unchanged in his final meeting to warns that some further tightening your choir. May be required. Country garden avoids a default with lastminute payments on dollar bonds. Happy tuesday. It is great to be back on the show with you, jen. Jennifer it is great and thank you for having me. Dani you are a pro. You had the rains yesterday and everything was great but it should be a morning of relief. We have the u. S. Dollar bond payment from Country Garden and goldman seeing a lower chance of recession. Someone should tell the markets that though. Jennifer we should see whether or not the u. S. Will reflect that when they are back from Labor Day Holiday. Lets look at s p futures at this point. We mentioned yesterday with the Labor Day Holiday and we did not see a lot of activity but what we did see overnight was a dip from the s p. Just over 0. 1 , and a sea of red at this point in time after relatively flat session. The markets were closed for the Labor Day Holiday on monday, but after the boost that the markets got on friday from the jobs report, we will see whether or not the resumption of trading today after the long Holiday Weekend potentially gets things back in the green. At this point in time, not seeing next. Dani not surprising that we are giving back gains that we had from friday but i feel like there should be more optimism that is not reflected. Maybe the bond market makes more sense in that regard. Treasuries, first daytrading of the week open lower, to losses. We are looking at yields barely higher on the front end. More movement further out in duration but we are up 1. 5 basis points. Maybe some of that is finally pricing out the cuts that are priced in. Goldmans says it is less likely we will get cuts that the market is pricing in a given what the economy is doing. Jennifer lets get over to a wrong in singapore avril hong in singapore. You have been taking a look at this all day. Talk to us about the equity picture for you are. Avril taking a look at this all day, and it looks like the negative picture that we started off with in asia has remained for much of the morning. The asia stocks are lower. A lot of the losses are coming in from the hang seng and that is because of the unexpected decline in the Caixin Services pmi despite its remaining in expansion territory. That is raising concerns about the chinese economic recovery. Chinese property stocks are lower today as well and that is despite hundred garden managing to avert a default and telling bondholders that has made payments on a dollar bond interest and that is a bit of relief, but not quite solving the issues in the chinese property sector. We also have the aussie stocks as well as the currency that are flat on the back of philip lowe keeping things unchanged at his last policy meeting. It is not just the Titan Services numbers that we are watching closely in asia. We also got hotter than expected inflation print out of south korea and the philippines and thailand. That is raising concerns that economists have underestimated the impact of Higher Energy prices and what that might mean for the global picture. Is this a scenario that will play out around the world . We are headed for a down day in asia stocks. Dani thank you so much for that. Bloombergs avril hong in singapore. Lets get to our morning roundtable. We are joined by jill disis, lizzy burden and Valerie Tytel. We have to start with where she left off. Country garden has told creditors that it paid coupons on two dollar bonds within the grace period which avoids the first default. Jill, let me bring this to you. I may look im looking at a market that looks pessimistic and Country Garden shares are down 2 . As a crisis not over yet . Jill i think you are right. It is too soon to call the crisis over but it is good news Country Garden. They have paid back interest by 22. 5 Million Dollars with bonds coming under the wire there. I believe the grace period ended overnight tonight. They are really avoiding the potential default for now but remember Country Garden literally just last week reported a major loss for the first half of the year. They also still have several other repayments do before the end of the year and if you look at the Pricing Services pmi that avril just pointed out, a contributor to that sector is the property sector. It indicates to us that there is still pretty big concerns for the property sector here even if we had a reprieve right now. Jennifer what is it you are paying attention to her what is happening next . You mentioned another payment before the end of the year. What do you have dry on . Your eye on . Jill can Country Garden continue to weather the storm they are in and what to do their look like next time . Is there turning of the tiedye . I am looking out for a bunch of support measures that were announced china particularly for the property sector so you are looking at lowering down payments for Mortgage Rates and we are looking to see how much of that translate to a change in sentiment for the property sector. We saw good news over the weekend with home sales picking up in the wake of some of that Mortgage Rate using measures. At this Mortgage Rate using easing measures. Theres a shift in the property sector and how much that helps developers and ultimately whether we see any further easing on the part of the government. Several positive signs here and there but there is a long way to go. Jennifer definitely down to the wire. Bloombergs jill disis. Thank you for your time and for joining us. Bloomberg economics leaves china is no longer set to eclipse the u. S. As the worlds biggest economy soon. This is of course a difference from what we heard before. Lets bring in lizzy burden who has more. What can you tell us . Lizzy we have had that reminder of chinese economic woes this morning and the shape of the Caixin Services pmi data weaker than expected even if it is still in growth territory. It is the weakest growth of the year. That has weighed on asian equities this morning but if you take a step back, as Bloomberg Economics has, this narrative that china inevitably is going to overtake the u. S. Comes into question. Actually, they say that is not going to happen until the 20 40s and even then, it is only by a marginal amount because youve got the structural issues in china, exports tumbling, the property was spreading across the economy and last year you saw the population in china dropped for the first time the years. What was once deemed inevitable is in question. If you are an economist you can only work with policy measures on the table at the moment so you are betting that there is not going to be a bazooka which is a pretty big bets. Dani it is worrisome and is not like the u. S. Is going gangbusters. What will pick up the mantle Global Growth . Stick with asia. Rba has kept rates unchanged at governor philip lowes last meeting with the Central Bank Warns that further tightening is to be needed. Valerie, was is a snoozer of a last decision from governor philip lowe . Valerie it went as expected. Most of us are wondering what kind of optionality will keep on the table for the new governor because he does step down in two weeks. He kept all the optionality on the table and said the rate because give them time to assess the impacts of rate hikes and that more tightening depends on how the economy does evolve. Let of optionality there the new governor and the rba. They held the cash rate at 4. 1 and kept the threat of further tightening still on the table. There are economists that do see a risk of economic acceleration in austrias later half of the year tempting one more hike from the rba but it is looking like there on pause from here to the new governor takes over. Dani i feel like we have been ignoring the u. S. , which is fine because they were off yesterday and they dont is a retention because it had a holiday. I want to point out the comment at Goldman Sachs because goldman has been more optimistic about the economy than most. They have cut their odds of the u. S. Recession the next 12 months to 15 . Previously it was 20 saying the change reflects continued encouraging inflation news, favorable real income outlook and decline in the jobs worker gap to just above prepandemic level. The fed and peers are set to cut rates by less than what the market expects because a neutral rate should settle about the post gse norm and because activity remains resilient. The bloomberg poll is much meyer much higher than 50 . That is for recession odds. Jill the consensus for the year had ability as it stands on bloomberg is 60 so goldman is very much more bullish than the consensus on the u. S. Economy. It comes at a time where many are expecting a slowdown in the consumer to really start to hit u. S. Economic growth and that is because from september 1 we had the student loan forgiveness that start to roll off as consumer start to repay their Student Loans and they will be buying less goods and being less active spending money. A lot of us are expecting some sort of turn in the economy as we enter the fall because of those headwinds. Goldman noting that the labor Market Reports we got last friday was a good one for the fed and noting the progress disinflation without any true labor market pain opens the door to avoid a recession and that was emphasis on their call. Jennifer students are not looking forward to those repayments, myself included. Lets look at events we are following today. We will have the ecbs Inflation Expectations survey. At 10 00 a. M. U. K. Time, euro area ppi. Dani im looking forward to it later this afternoon we will get comments from the ecb executive board member Isabel Schnabel who will be chairing a panel at a legal conference. Im interested in this because it was her comments last week that shook things up. People interpreted them as more dovish as we are worrying about stagflation. Valerie the one thing about her speech she drew attention to the ecb inflation asportation survey that we get today. The market will be focused on that at 9 00 a. M. It is almost the last day to print before the ecb convenes next week. We are not pricing in too much of an ecb hike next week, only 20 but if we get hotter than expected inflation asportation print in the survey, because she drove so much attention to it attempt the market to price and more for the meeting next week. Dani there is room to do that. That is Valerie Tytel and you can get a roundup of all the stories you need to know to get your day going in todays edition of daybreak. Terminal subscribers can go to dayb on the terminal. Jennifer we will dive into markets including what austrias Rate Decision means for policy in the worlds other big Central Banks. That is next. This is bloomberg. Dani welcome back to daybreak europe. The rba has held its cash rate target. 1 in the central bank did however warn of further tightening that may be needed to hit its inflation goal. Joining us now is mliv strategist mark mandel. This was expected and is governor philip lowes last meeting. Can you tell me why we should care about an rba meeting where they did nothing as expected . Mark well, you should care because it is a lovely template for other Central Banks who may want to do a pause of their own. Im looking at the Federal Reserve and European Central bank. He put all the arguments in place for a very neutral outlook and we were concerned about the data but have done a good job on inflation and we may need to hike again if the data tells us to do so. All those kind of things fits neatly into a package of somebody who thinks have done a lots of good work they would like to stay on hold for quite some time and let the economy catch up with rate hikes they have done. Doesnt that sound like the fed and ecb . It is a pretty good message for the rest of the g10 thats maybe we will get a halt this month. It looks pretty exciting on the surface and may be the time september is over, all weve got is major Central Banks staying on hold. Jennifer lets talk about Country Garden because we were talking to jill earlier and she was saying they waited until the last minute and yet it was still big news for us this morning. Give us a sense of how markets are reacting to this. Is there excitement and is as potential a change in the outlook and sentiment of Country Garden . Mark there is a certain amount of relief because it is better that they paid. The amount itself is relatively small in the context of the size of their outstanding, 22 million when youve got 15 billion of debt is not an enormous amounts. It is the beginning of the process but at least advise him sometime. Obviously it buys them some time. If they missed it there will be threats default they may have to go into liquidation and it would be very messy and ugly. Theres a lot resting on the fact that Country Garden stays intact and gradually works through its problems. It is good from that point of view but there is a lot of work still to be done. They are huge company, very important for the whole structure the Property Market in china. They are already asking for delays on their yuan on shore bonds. Some have been delayed already and theyre looking to extend evermore several more as well. They may ask for something similar on dollar payments as well. It will be a long process but at least this is a positive step we may see more relief in equity markets in asia this afternoon but dont be mistaken, this is a very big problem and it is not just Country Garden. There are other Property Developers in similar struggles and there is a long way to go. Dani again, the market not reflecting any of that hope at this moment. Hopefully we see that come through and we could use the news. I want to ask about the bond auctions that we will get from japan this week. I was reading the Credit Agricole note saying the boj likely will not exit yield curve control until 2025. Who is still buying this market . Who was present at these auctions when already, the government owns it so much of the japanese jgb market . Mark like any major economy, you have a domestic base does not have a whole lot of choice particularly if you are a Life Insurance company in japan, you need to have long duration. You have a sudden flow of money, you need to reinvested somewhere. If 10 year jgbs for all you have, that is where you put your money. What makes a difference to the market course is the new money thats people that can choose between equities and bonds going overseas or staying at home, those are the guys that make a difference. Certainly, although this auction went through without any big problems, if you look deeply at what happened, a lot of the bonds are issued at the lowest price. That is not a great sign for the auction. Theres another 30 year coming up later this week that will be more difficult, the tail end of the steepest part of the curve is not always easy. There is less demand. It will be tough week you had the bank of japan meeting coming up later this month which most people consider to be a light meeting in the sense that they may tweak policy again. At the same time, we have a good macro view out today from our colleague in tokyo saying even the unpopularity relative unpopularity of the japanese government, even that may weigh on bank of japan policy as well. Theres a lot in the mix and japanese bonds will have a turbulent week. Jennifer thanks to bloomberg and why strategist Mark Cranfield for that update. Coming up, it could be a 1. 3 trillion problem. 3. 5 years after covid sent Office Workers home, the commercial Real Estate Market is counting the cost. We will take into that story next. This is bloomberg. India, home to a now record 1. 4 billion people, more than half under the age of 30. But that also includes a large number of jobless youth anywhere in the world. The Fastest Growing large economy in the world, india has the third highest number of billionaires but on per capita income, it ranks at the bottom. The widening gap between the richest 10 in the bottom 50 makes india one of the most unequal Company Countries in the world. Democratic English Speaking india with an army of Software Engineers has started to become a major economy since its economic liberalization in the 90s. Authoritarian china has made boulder moves to become five times bigger. So why might this be indias moment . One big reason, it is not china. Policymaking in beijing nowadays remains hard to predict. Western countries are wary of chinas growing economic and technological clout. International companies are seeking supply chain diversification, china plus one. To speed that along, indias government is spending record amounts on