Watching daybreak asia coming to you live from new york, sydney and hong kong. Counting down to the major market opens in asia. Australia hasjt opened for trade, the top stories this hour, traders on edge ahead of a job support that might set the tone for the november meeting. The sec is feet seeking to force elon musk to answer further cushions about twitter shells after shares after failing to show up as reflected requested. And jim makes a six wage offer as the strike heads for a fourth week. We have the open of the asx 200 here, and sherry has breaking news around peru. We will watching peru cutting the reference rate to 7. 2 5 from 7. 5 . This is the second straight month that we are seeing this cut from the central bank and peru. Improve. Theyre very high given inflationary pressures in the country but we are starting to see more and more Central Banks across latin america start to cut, including brazil, and mexico. And now peru is cutting for a second straight month given that their economy is under pressure. Inflation has also slowed to a twoyear low while the economic challenges continue. And that is real hat that narrative has been around the world. Inflation started to cool in emerging markets, but growth also being challenged. And now these developing economies are taking charge when it comes to monetary easing. Thats right, sherry, but very sensitive to what is going on at the fed and whether we need to see or will see a further hike this year will perhaps be answered to some degree by that key u. S. Jobs number coming out later this friday in the u. S. The headline rating, i dont want to get through to many of thedetails, they expect 170,000 jobs to be added over the course of september, if we come in hotter than that, when you look at those whisper numbers, traders expect 190,000 jobs, awaits cap there,ut if it comes in hotter that could put the need for a fed hike back firmly onto the table. I of that we expect very subdued range bound trading. You see the 600 in the opening moments here very flat. You can see no movement coming through with treasuries, the aussie dollar. Lets change on and look across the rest of the region because kiwi stocks are already online and 20 ahead to the opens for japan and seoul and the next hour. But so far this data plate is very range bound, and we are just keeping a watch throughout the session on those numbers, on the countdown to the u. S. Jobs numbers later. We aeady saw some indications of perhaps what we could expt with weekly jobless claims numbers ticking up slightly, but holding near historical lows. We are watching that resiliency in the labor market, and we saw u. S. Socks finishing the session in new york fractionally lower. Right now we are not dog much, but we are watchg the 4204 level for the p 500 because that would be the 200 day moving average. It could determine whether we see the longer term trend going up or down. In the meantime, treasuries are mixed. 10year gilts down a little bit, a lot more stabilization in todays session towards at 4. 7 , but the longer and still continues to rise. The 30 year yield still at the highest since 2007. We are now seeing oil gaining ground aftewe saw ses being extended i the new york session tr the worst day in oera year. An that market is al out whether we are concerned about e demand outlook given higher Interest Rates, but at the same time supply concerns. Lets get some more conversation on this. Our u. S. Economy Senior Editor and chief correspondence correspond for asia joins us. Chris, lets set up with you, expectations when it comes to payroll numbers and not just expectations but how much hinges on this number even we are seeing records record amounts of fed fund futures in this moment. That is an Interesting Group factoid that they are sharing. This does feel, there are always big reports, this is the month the u. S. Jobs report, the biggest indicator in the world, but this one seems like, as garfield will no doubt under to shortly, if generally important one because of what has been going on in the bond market. This significant runup to yields to levels that we have not seen in many many years. It seems like if we get a hot number tomorrow, and the whisper number is getting higher than the median with two hundred thousand forecast by Goldman Sachs for september payroll, it does feel like that would give selloff. Fuel on the fire of this conversely, few people e, but a sudden drop off in hi could provide a little bit of relief. It does feel like this will be a big one. We got more indications of what the fed is thinking from the San Francisco fed president merely mary daly, alluding to what the bond market tightening means to actually hiking rates. Take a listen. The bond market has tightened considerably. 36 basis points since we met in september. That is equivalent to about a rate hike. The need to do more tightening is not there. We have seen a lot of hawkish rhetoric from the fed, but can i take this as a dovish call that perhaps given the market generations in the treasury space might not necessarily have to actually hike more . A lot of it depends on where yields go from here. There is a risk that if we did get softer than expected data today, out of payroll, you would see a fresh relief rally for bonds which would bring some yields back down. What we saw this week is yields jumping by 10 basis points, and then they came back down by more than that. In the wake of adp reports which showed private payroll was softening noticeably. This it is hard to say to senator flake definitively. It also depends where does the data coming. , in. It was clear from that perhaps modestly dovish take from the San Francisco fed president that they were not looking at moving towards lower rates. In the best case scenario, so to speak, they hold where they are, and they keep what they regard as being a restrictive level for a long time. And that is the very thing that has been spooking the bond market, along with other issues on supply at concerns about fiscal sustainability. Because its the long end of the bond market that has been leading the latest selloff. That has been something that has been very hard for a lot of investors to cope with in the bond market and without. Because so many had piled into that long and thinking that the peak was in there and that the fed would succeed, and that was the place to get your gains over the medium term. It spooking everyone, because the concern continues to be that this we could see a policy mistake that over time lead to a recession. Chris, we got more positive views from the imf that perhaps they are banking on a soft landing. Thats true, although that report, this is the imf getting ready for their big shindig next week in morocco, their annual meeting, saying that well, it looks like there is a greater chance for policymakers around the developed world to bring inflation down while achieving that story itself landing. It does kind of feel like this was prepared three weeks ago or so before this big runup in yields. The tone feels a little bit out of date, to be honest. And i think the core question is, as garfield was alluding to, how representative eased mary daly of the San Francisco fed, how is the fed thinking about the extent to which this rise in yields or this tightening of financial conditions is effectively doing the feds job for it. Back in august, the new york fed president , john williams, had said that as inflation comes down, its basically going to increase our real Interest Rate, we are going to maybe be tighter than we had planned. And were going to need to think about cutting rates. Next year. We had not heard that, again, from fed officials recently. And if we dont, i think the danger is, indeed, going to be focused on a fed mistake. It could be pretty expensive as a mistake, or a mismatch with expectations for what we get. We talked about this and there, bond traders waging historic sums when it comes to that november outcome. That highlights what chris was saying, that this really is bigger than even the usual payrolls report. Particularly, its kind of strange to think that we have got this huge surge in bets on which way the fed might go in november. About four weeks out, more than four weeks out, from the meeting. This is the last payroll report we get for the meeting, but they will still be inflation data and a whole series of other reports that can feed into how the fed sees the economy developing. I dont think that interest is likely to come down rapidly either, we could see further searches because theres going to go on being a locking play, precisely because we have got yields at levels very few people expected to see them at, and the market is really in a sort of trackless wasteland when it comes to the bond market. Once yields go past 5 , people start for the 10 year, though Start Talking about maybe the next level be 5. 25, 5. 5. There is no solid guideline out there, just people grasping around numbers as personal soon said they might have. Its a market that is really really uncertain about how much further this could go. Garfield reynolds and chris there with our top stories today. Still ahead, warning signs flashing that the strong rally in japanese value shares this year has won its course, a closer look later this hour. But first, jl warned capital tells us why there Market Outlook has worsened in the last three months, more on their investment insights next. We have seen this backup in yields and pain that is coming. Most of this selloff is overdone. Treasuries have always been that supersafe asset and it feels like something is cracking. We are still waiting to see the worst of it, yields have gone up and there are plenty of reasons for that. We have new data that justifies 50 basis points higher in 10year gilts in a short amount of time. If you see slowdown stabilization, the upward trend in yields stops, and if that stops, every other market stabilizes. Were going to see treasuries go lower, and go back to thinking what is the longterm trade. That is probably higher yields. We are very bullish on short maturity high quality Investment Grade bonds right now. Valuations are attractive here, this is a good entry point for yield investors. Tv guests reacting to the recent selloff in bond markets. Our next guest says her Market Outlook has deteriorated with the risk of stagflation looking more real than ever before. This is the founder of Jl Warren Capital. Thank you for them with us. We heard more positive sounds coming from the imf in a speech today that says the presidency is the likelihood of a soft landing for the world economy. Is your concern about a deep global recession or chest that markets have not priced in any sort of slow . I think the market has priced in some slowdown, but will hear what we are seeing is a 180 degree reversal of before when they were tried to synchronize the growth in the two largest economies in the world, u. S. And china. To chinas credit, at that time, the stimulus package that they put into roads and infrastructure to save them from going deeper into financial crisis around 2010 kind of, you know, save the world. You saw the developing markets starting to recover and starting to grow at 3 , and china, because of the infrastructure stimulus as well as real estate markets started to grow in the high Single Digits. What we are seeing now is the complete opposite of that. What we are seeing now is the Federal Reserve cut rates in a year and a half. The Mortgage Rate went from 2 to 8 , in just 18 months. Versus china. Everybody talks about credit easing not paying enough, and then starting to give handouts of dickens the consumers. The reality is the government is just out of cash. There testing throughout 20202022, thats more than the stimulus money, put into the infrastructure back in 2010. D expect a huge catch down when Chinese Markets come online again next week from golden week, and what you expect any sort of rebound going into next year given all of the stimulus measures that we have seen . Although you do not seem to think that that would be enough. I think the market is probably going to move sideways, because on the one hand the expectation is pretty low. If there is any grain, its likely rallying off low expectations. But there is no derivative, no clear guidance from a policy perspective. And i feel like the consumer is very cautious. You see record numbers golden week compared to 2019, they are not back to that level yet, they would rather spend more money on services, and cut spending on goods. So, and theres expatriation going on as well. And south korea, they might spend money there, and that will not help the gdp, i am sure. My question is, do we expect growth to ever go back to those levels, because if we accept that these kind of structural elements to the slow down, the Property Market might be allowed to at least achieve some sort of soft landing, but to correct, ultimately. Does that mean normal growth for longer is what we expect for china, and how do you invest around that, what is resilient in that sort of environment . Thats really interesting. We do expect no growth in china over the next couple of years. Largely because the thing about the Economic Growth model, it largely hinged upon the Housing Market and export. The Housing Market has been declining in double digits for the last two years. And then the key point that people kind of dont quite realize is that in 3040 of the house is sold, there yet to be completed. That is because developers are going through a liquidity crisis. It is going to take up to four years for that excess to washout. And for the market to recover. On the export side, the trade numbers, u. S. , its apparently putting incrementally more sanctions on china. And the u. S. Has been their most lucrative trade partner. China has to look to less attractive partners like russia, which is going to have an impact, and not only the profit will on the fx will impact the trades in the basket. We do see a scenario where china no growth to slow growth can last through those years. In that sense, we discussed earlier, we are cautious and we believe that that sure strategy will work very well for the next few quarters. Really great to chat with you, the founder of Jl Warren Capital joining us. Much more to come here on daybreak asia, this is bloomberg. We do have breaking news crossing the bloomberg when it comes to twitter, advertisers are back but spending less, the ceo is giving an upbeat briefing to debt holders, saying that we will be cash flow positive, including debt, in 2024. X has given bankers an update about the attempt to reinvigorate growth, trying to return to twitter with smaller budgets and before. Most of its advertisers have returned, up 35 in june according to the ceo, telling shareholders during the brief all during the briefing on tuesday according to someone in that call. Most companies are being more conservative with their budgets. She joined the coming back in june and said that revenue is going in the high Single Digits quarter on quarter across advertising, data licensing, and subscriptions. We know that that 44 billion to cover up twitter really settled the company with 13 billion of debt, sherry. I was looking to that, because the sec is forcing elon musk to answer its latest questions about his purchase of twitter shares before he bought the entire social media platforms. For more, lets bring in vonnie quinn. Funny, what do we know here . The sec is trying to force must to give testimony and this is very unusual that they they would do this. It is very rare, but when it happens, the judge usually sides with the regulator and would force, in this case, elon musk, to comply. The umbrella investigation is to whether or not he violated securities laws, that is the secs drop, to see about market manipulation. Before acquiring all of twitter in 2022, musk, he owned a stake in it. But he only disclose that to april. Rules require that if people by more than 5 , they must disclose it within 10 days. There is a question of whether he defrauded investors in twitter, as it was called at the time, and shareholders would be interested to know that. Incidentally, there is a shareholder lawsuit ongoing against him led by an oklahoma Firefighters Pension fund. And the judge in that case said that yes, it could go ahead. Musk does need to understand that he has to face this lawsuit. The judge found evidence that musk does understand the five disclosure 5 disclosure rule , because he had testified about that wonderful. We now know that the sec is investigating, which is interesting. And we know that the test of fate testimony had to do with things about the location, but they were happy to move the legal home the testimony to his legal home in texas, and elon musk refuse to testify. Vonnie quinn with the latest. Coming up, golden week hollow lake shipping up to be one of the busiest ever, spending exceeding prepandemic levels. We have a closer look. This is bloomberg. Breaking news out of japan, we had the labor cash earnings rising only 1. 1 year on year, and missg economist expectations. Alo a slowdown from the previous month. Adjusted for inflation and real ash earnings has a contraction of 2. 5 year on year, also a much bigger contraction that economists that economists had expected. These week weight results are a setback for the boj, we have been watching these income trends closely there will be they wlbe a key factor in determining the lonrange likelihood of achieving sustainable inflation, not to mention, of course, a steeper decline in real eaigs expected to wait on consumption as well. Heidi, again, labor cash earnings disappointing in japan. Central banks in focus as we await u. S. Payrolls and the indications for the fed. The Federal Reserve bank of San Francisco says that the central bank can keep rates steady as indicators from inflation to joblessness continue to cool. Speaking at the Economic Club of new york with our colleague, she weighed in on the recent selloff that we are seeing in the bond market. Take a listen. The bond market has tightened considerably, 36 basis points since we met in september. That is equivalent to about a rate hike. And then, the need to do tightening additionally