Over in the u. S. , moodys warns over a potential Government Shutdown as the deadline nears, adding to the fire when it comes to the west bond market. The eu trade chief attacks chinas policy, saying the stance is hurting trade. Buzzer cardio clinical headlines, lets get to the markets, because there is a lot to talk about. Already we are seeing a massive on market move overnight. If you start to see a Government Shutdown, the stock market will get hit first. That is where you are seeing sentiment sour. We will dive into this with valerie in just a moment. Its that red on the screen you saw in the Asian Session that is starting to spillover. Every long standing by in just a moment. Even that defensive bid we saw in u. S. Assets yesterday no longer hold, pulling back even in nasdaq 100 futures. Essentially, your winners of the last you sessions are your losers this morning. A lot of that is largely going to be a liquidity story. Crossas it we go. The bond market story will be crucial, specifically looking at the 10year yield, 4. 54 on that note. Pushing the dollar stronger which is interesting because you are seeing weakness across all the g10 currencies. And of course, our oil check. We are treading further away from the 100 dollars a barrel level. A 95 handle we will call it. Theres your cross assets picture. Lets go back to asia and set the tone for the day. Avril hong standing by in singapore alongside Valerie Tytel in london and jill disis in hong kong. An allstar lineup. Lets start with avril hong, walk us through it. Kriti, were really seeing how when treasury yields flying that momentum carried through into much of the asian trading session. Those yields climbed in new zealand, as well as in australia, as investors recalibrate expectations for Interest Rates. We are not just seeing the selloff in bonds, but stocks, as investors contend with the risks from high Interest Rates, but also, from the deepening property prices in china. The msci asiapacific is headed for yet another day of losses. Losses are accelerating as the session progresses. We are seeing the currency space, that dollar story, as the dollar rose, asian fx also getting hit. We are seeing chinese authorities coming up with yet another strongerthanexpected fix on record to prop up the chinese yuan. The japanese currency getting yen intervention from the finance minister once again, but overall hovering at those weak levels. Lizzy that is the asia story. Lets talk about evergrande, specifically. Avril, i thought the story was over a couple of months ago. It looks like it drags on. It clearly is not over. It looks like we are getting part two, part three and four of the evergrande saga. Evergrande has missed bond payments. Reportedly, several former executives have also been detained. This highlights that the crisis is deepening for what was once one of the Top Developers in the country. Lets not forget that the debt is really piling up. That is raising those fears and the risk that we could see potential liquidation. That is raising concerns about what this is going to mean for the broader chinese economy, especially given the number of Unfinished Projects of this property developer. Kriti certainly, a lot to watch when we talk about how much of this is an idiosyncratic story. Avril hong in singapore with that story. Lets bring in our markets are for Valerie Tytel. We are coming off a massive move in the bond market. Talk to us about what is top of your agenda. What a your medic move in the treasury market yesterday. It was on no major catalysts, that is the terrifying thing to treasury traders. It is rare we see bare steepening move at any point in the cycle. This steepening move led by longend weakness, led by that rise in 30year yields. We had the 5s and 30s curve turn positive the First Time Since august. The rise in yields led the dollar to breach year to date highest. What is the driver behind all this . There really isnt a clear answer. Which makes the situation even more worrying. If you look at how the treasury markets traded in asia, there is still some pressure, especially in the longend. This is continuing, all led off by the fed last week, but many raising an eyebrow to when this move will end. Kriti you said there was no real catalyst. It feels like in the markets language, the word recession comes up again. We are getting comfortable in this idea of u. S. Specific resilience. Talk to us about the warnings we are getting on that front. We had warnings on the consumer from wall street and the fed yesterday. There was a study showing that all but the 20 richest americans have run out of excess pandemic savings. That was a key to why the consumer would turn around in the fourth quarter, because of dwindling excess savings. The consumer will be pulling back on spending in other areas. We also had warnings from wall street banks. Morgan stanleys mike wilson becoming very bearish on the consumer sector, mirroring what Goldman Sachs analysts said. We had jeffries downgrading consumer stocks yesterday. A lot of these had the same narrative in common, all about this Student Loan Repayment starting to pick off kick off. The rise in oil prices eating into consumers savings. We have to look at how the Government Shutdown will change the narrative. It could be another drag on gdp in the fourth order. Kriti watching how quickly the tide changes on that front. Valerie tytel walking us through that story. One of the major factors that could affect the bond market is the idea of a potential looming Government Shutdown. We have 3. 5 days left before we get that deadline, at least weekdays, how much closer to we get to that crisis point . Something moodys mourned would affect the u. S. s credit rating. To walk through all of it, jill is standing by. This feels like quite the stark warning. It really does. There is a couple things we have to keep in mind when it comes to the moodys morning. Obviously, they are not downgrading the u. S. From its aaa sovereign rating. But when you take into account the fact that fitch jested a downgrade not to recently, you have concerns about this Government Shutdown. I think the framing of this morning is interesting. They talk a lot about how there is not a ton of economic effects from a shortterm shutdown of government. Just the fact that we have been having this conversation is impacting confidence around governance and the u. S. Relative to other aaa sufferings. Combine that with that fitch downgraded which was really jarring and weighed quite a bit after. This is a pretty stern warning from moodys. Kriti pretty stern warning. You had warnings from the likes of kevin mccarthy. His middle name is basically austerity. He is trying to create some sort of deal on the gop side. That doesnt have the same momentum than some of his previous offers have had. How does this get fixed . It really seems like it doesnt have all that much momentum. What we have heard is maybe republicans and democrats are reaching some kind of shortterm deal to make the initial deadline. That lasts 46 weeks and doesnt address underlying issues republicans have singled out. In particular, looking at emergency spending as it pertains to you. Pertains to ukraine. We were talking about shutdowns. We are at risk of ending up in that situation. Maybe we reach some kind of shortterm deal. But it looks like we will have to do a lot more so it feels more longterm. Kriti something we will be watching very closely. This will have repercussions for the entire world. For our markets audience, its a question of where you allocate your money . Is the u. S. The best bet. Lets get to things we are watching out for. At 8 00 a. M. U. K. Time, the ecbs chief economist speaking at the bank of france in paris, as well as on macroeconomics. At 1 00 p. M. U. K. Time, the Hungarian Central Bank delivers its latest rate decision. Most economists seeing a 100 basis point cut taking its rate to 13 . At 3 00 p. M. U. K. Time, home sales numbers, something you will want to watch closely. And more insight into the health of the u. S. Economy, Consumer Confidence data due out at the same time. Lets get a roundup of stories you need to know. All you have to do is type in dayb on your terminal. Of the top stories, you will see the idea that stock leverage is top of the agenda. Jamie dimons warning as well. We will dive into all of those topix coming up, David Solomon warning that it will be hard for inflation to cool without an economic slowdown. We will bring you the words from the chief of Goldman Sachs, next. This is bloomberg. It is going to be hard to get inflation back to the target. That probably means if inflation is sticky, we will see additional Interest Rate increases, and ultimately that probably does lead to more of a slowdown in the economy. Whether thats a recession, or just a slowdown, its hard to say. But it would be unprecedented to go through this type of tightening cycle and not see us get to slower Economic Growth than what were seeing right now. Lizzy Goldman Sachs ceo David Solomon speaking at the American EnergySecurity Summit panel in oklahoma city. Lets get more with paul dobson, executive editor for asian markets. Lets kick off with market pricing. As David Solomon said, a slowdown may be on the cards. Talk to us about what that looks like in terms of pricing in a latecycle piece of the economic expansion. Markets are a little confused by everything right now. In some ways, you can see that the soft landing pricing is still in there, and yet, there is more risks starting to emerge. Risks, on the one hand of more aggressive fed tightening, and risks on the other hand that that acceleration in tightening causes something nasty to the economy three or six months out from here. If you look at the bond yield spectrum, we have had rising shortterm yields, and that is starting to infect the longerterm side of the race market. Embedded with that is inflation risk, fed risk, supply risk from u. S. Fiscal spending. All of it pushing up back end yields, leading to a little bit of a shallower inversion of the yield curve. So far, you could say thats okay, people have been able to tolerate higher u. S. Interest rates but we are starting to see some wobbles now in the equity market. Some of the most shorted stocks getting more beaten up. Some of the markets best ways of expressing those recession risks are starting to feel more of a heavier weight on them as well. Kriti if thats the economic piece of it, and we are talking about the fiscal side of the equation, u. S. Shutdown looms again. There is complacency as we talk about shutdown every couple of months anyway. Paul, should the markets care about it . There are reasons to care, kriti. Number one, theres going to be an absence of data. So, its going to be hard for investors and the fed to gauge exactly what the state of the economy is, and how you should be pricing that. That blackout of information could be risky, or could exacerbate market risks. Although really from the perspective of ongoing servicing of debt, its not that significant, as moodys has been explaining, another sign of dysfunction within the government and the inability to get deficit plans agreed. The market doesnt like all of that uncertainty. It starts to price a little more risk into the u. S. Yield curve. As a result of this sort of, the uncertainty there, almost the credibility risk, or the credit risk. From that perspective, it may drive a little risk off sentiment. The iranian is that risk off sentiment pushes the market toward its favorite haven. Right now the favorite haven is the u. S. Dollar and u. S. Dollar cash securities. It is back into a positive u. S. Mindset in some ways as well. Kriti it is the exact trade in todays session. Our markets reporter reminds me that if we do see this Government Shutdown, payrolls data next week could be delayed. That will throw a loop for the markets. We have covered the economics and the fiscal side. Now we get to the juicy stuff, the Monetary Policy. We heard Neel Kashkari, the governor of the minneapolis fed, to i want to say overnight. He spoke about how hawkish he is. Take a listen. There is a lot of uncertainty about how tight is Monetary Policy right now . Thats why, if you look at the projection rather, we have a majority of participants have us raising rates one more time this year. Basically, we will take our time, see what happens to inflation before determining how high we need to go. Kriti talk to us about that. One more rate hike. Is that going to make a difference . Well, its more the expression and the longerterm filter through that the markets take away would be. One more rate hike by the end of the year means another few months before we get closer to cutting rates where we are at this moment created emphasizes the higher for longer rhetoric and stresses the feds determination to keep going with higher Interest Rates until it is done fighting inflation. And it can leave open the door to two more rate hikes. Maybe another one next year. Market pricing, as kashkari was saying, is not very much further from here. The fed wants that twoway risk to still be in the market. It wants perception that rates could go higher if they have to to startling down inflation expectations. Kriti it really isnt a surprise that Neel Kashkari is asking for one more rate hike, when the consensus is wanting to pause for a little longer. That will be something we digest. Paul dobson, executive editor for asian markets, we thank you. There is more markets coverage and geopolitics ahead. This is bloomberg. Kriti welcome back to daybreak europe. We are monitoring be inflation story and the Monetary Policy story which hinges on the commodity story which brings me to the oil market. We talked about 100 a barrel on the horizon. Something Goldman Sachs is saying will be the 12month forward price, but brent retreating further from the 95 it hit in the middle of last week. In the u. S. , nymex crude trading below that 90 mark. Not a ton of momentum in either direction, down 0. 4 , but pricing is on the minds of not just people in Monetary Policy, but the bigwigs in u. S. Oil majors, which brings me to Continental Resources c out saying the price of crude oil will absolutely rise to 100 a barrel. We will see volatility in the 80100 dollars a Barrel Oil Price environment right now. The higher prices a reality we will have to deal with as we think about the energy needs of the globe. Kriti meanwhile, occidental petroleums ceo discussed the outlook for crude races. Crude prices. Alix steel has that interview. She says the Company Plans to keep reduction study production study. We all have an opinion on oil prices, but usually, were wrong. I would like to say, the fact is that since china, brazil, india, and russia had their gdp spurt back in 2004, real wti prices have averaged more than 80. Now that indicates the midcycle price of oil is around 80. The reason the prince has been doing what he has recently is to balance the markets area there was a time of overspend follow by a long period of underspend in the industry. Now, to balance the markets is best for all of us. If you wasnt doing that, prices could potentially go over 100 paid in balancing the market, you protect the downside so you have a healthy oil and gas industry but without damaging economies around the world. Some of the undersupplied was because of you guys, shale players. Certainly, our industry has gone to the point where we are practicing much more discipline than we used to to practice. You see that prices have been moderated recently. A lot of people had predicted 120100 30 oil. You havent seen it, because the industry doesnt want to go there. In that time period i described since 2004, prices were above 100 26 of the time. They will be cap disciplined or you will pump more . We are cap discipline. We dont pump significantly in a market where we dont see the balance. And then it would be at a moderate pace. We are focused on returns than production volumes. Any demand destruction . Are you noticing anything on the backside in terms of demand . We dont see any demand dysfunction. Destruction. It prices above 100, it wont destroy demand. We are seeing gradual improvement. Even in recession, i dont think demand would drop so significantly that it would drive prices. We are at an Energy Security summit. Part of the line is lets unleash american oil. Oil can go to 4050 five dollars a barrel, you need higher prices. If you got the goahead do whatever you want, would you . Are there other constraints . The constraints are making sure you increase value. That you dont destroy value. That 26 of the time that prices were above 100, a lot of value was destroyed because we drove up the cost of what we were doing. We were inefficient at that activity level, the industry in general. Now there is a lot more discipline around how to do it, how to do it better, and not to get into an oversupply market. Kriti the occidental ceo speaking at the American Energy summit. The core of the story is how much do you American Oil Companies want to increase production . 100 oil and if its they might be hardpressed to bring that to market. The eu trade chief warning chinas stance is hurting trade. The latest from dombrovskis and his trip to beijing. This is bloomberg. Youre probably not easily persuaded to switch mobile providers for your business. But what if we told you its possible that comcast business mobile can save you up to 75 a year on your wireless