Haidi welcome to daybreak australia. Counting down to asias makeup major market opens. Shery the top stories this hour. Treasury yields hit some of their highest levels since 2007 head of fed today. Instacart making davids cash gains on its trading day. Haidi oil prices are presenting the fed a quandary, adding to inflationary pressures. Shery indonesia ion of critical mineral trade deal with the u. S. As the green transition accelrys. We will hear from the indonesian president. We are seeing a little bit of green but not a lot of movement. We have the s p 500 down to a three week low. This on the eve of the fed rate decision. The expectation is for the fed to deliver a hawkish hold. This with the fact that we do have Higher Oil Prices, not to mention traders were watching hot canadian inflation data. For more clues of where global prices are going. Take a look at treasury yields which rose across the board. The fiveyear and 10year yields adding the highest since 2007. Youre watching wti prices in the asian session, down a little bit but above 91 per barrel. Brent topping 95 a barrel at one point. Concerns about where the fed goes. Instacart trading debut, jumping 12 . This following arms listing as well. Perhaps we could see a boost for Equity Capital markets. They really need it. Lets talk about what is happening with the inflation picture. Oil prices are low for their 2022 high. The latest surge is posing risks to the feds efforts to engineer a soft landing. Lets bring in our u. S. Economist su keenan lets start with stewart. We are expecting the pause. What happens if we continue to get Higher Oil Prices . Guest there is residual effect of higher oil and Energy Prices, Higher Energy prices, higher jet fuel. Higher Airline Ticket fares. We can see some effect in the core. I imagine the fed will be reading through an increase in the headline inflation, it has a good rule of thumb that has served it well. A 10 increase in the price of oil begets 20 basis points of inflation thereafter. The fed anticipates this. And we have not seen this much move in gasoline prices over the month. That is what is going to matter for consumers most. That is with the fed will be looking at. Shery the concern is if we get Higher Oil Prices, we might repeat history. In the 1980s and 1990s, we fell into a recession. Tell us about what we are expect in terms of oil prices. Su how much higher do we go from here . We heard the other day the ceo of one of the major oil companies, chevron, saying 100 is right in front of us. Even the bearish banks are turning starting to jump on that prediction. You can see oil has jumped year to date, you know the story, it has to do with the shrinking supply thanks to opecs extending output curves. Major moves in time spreads. These are the markets most widely tracked gauges. Brent and wti are trading in backward asian, that is a very bullish structure. It indicates tight supplies, the front end of the curve is more expensive than the backend. That is about a dollar difference. Traders and brokers say this happens as premiums for real world barrels so higher. Especially here in the u. S. Oil is having a relentless search and it is starting to be a major issue. We are seeing its impact trading, wall street Financial Advisors telling their clients to jump in to oil stocks. We know that on monday the Saudi Oil Minister and at a canadian conference talked about keeping markets stable, which has caused concerns. Output plans will be reviewed every month, but they have extended their output curbs. It is putting pressure on an already tight market. Haidi how much should we expect us to show up in the headline inflation in september . Stuart since oil prices act through gasoline prices, we can track the average daily class lien daily gasoline price in august. Right now it is about flat if we are not seasonably adjusting. We always anticipate there is going to be an end to summer driving season, we have not seen that. The seasonal adjustment factors boost up the contribution from gasoline in september. So far what we are tracking, it looks like it will be five basis points. Headline cpi from gasoline. Su is right, we will see Energy Prices continue to rise. For every 10 percentage points, we end up seeing 20 basis points in headline inflation. Haidi we have other disruptions to global gas markets. What does this mean in terms of gas prices . Su we are seeing gasoline prices, the highest seasonal rates we have seen in a decade. To pick up on what stuart is saying, where you see said see spending on gasoline prices move higher, that typically precedes a recession. This is a major concern not just for economists and the fed, but for the biden campaign. President biden had made promises that he would keep a cap on gasoline prices and oil prices. And what opecplus is doing in terms of the output curves is not helping him out. In terms of oils direction, while it appears we are going higher, we are seeing a leveling out in u. S. Trading. We did not see wti level out towards the end of the day and reverse some of its gains. Technical analysts are warning we could be setting up for an overlong condition in which oil does retrench. But many analysts are saying shortterm, we are likely to see oil weekly move above 100. Shery we have the latest from in terms of the global economy. Right now it is a downgrade of growth expectations. What would that mean for Central Banks . Stuart we are coming to a point where there seems to be consideration of central bank divergence. It seems like they are acknowledgment even though there seems to be a growing consensus that risks are shifting to the downside in terms of growth, inflation is not fully tamed around the globe. There is a contribution to headline inflation, it trickles through to core inflation, there are components that have not come off yet, including shelter. Which is Interest Rate sensitive over time. The oa cd is acknowledging that even though there is risk to growth, Monetary Policy makers need to keep their foot on the brakes to prevent core inflation from surging. Shery instacart racking up that 12 trading debut, gain after one of the years biggest ipos taking the value of the Online GroceryDelivery Company to over 11 billion. Katie ruth drews us now. Katie ruth joins us now. How did instacart do, what does that tell us about the future of this stocks trading . Guest the good news is it went up, but not as much as they were hoping. It popped this morning, maybe 40 . Now this is more subdued, 10 . But it is still up from where they price. They priced it at the top of the range. Haidi we have seen other in the ipo space as well. Katie a lot of people are watching instacart, which has followed arm and claudio, clvio, a lot of people are curious to see how this does. The ipo window has been closed since 2021. It has been over a year, almost two years, since we have been seeing big tech ipos. There has been much that has been said about whether the window is open. Bankers are trying to price these conservatively enough that they pop and make a good First Impression on the market so other companies will feel safe to go public soon. Shery is it interesting that we saw instacart lining up these big investors to support their listings, what arms did as well . Is this how you ensure the health of your trading debut . Katie it definitely helps to have big anchor investors writing checks and suggesting that they are betting on the company. Some of these ipos did what is called a low float low flow ipo, where they do not release a lot of shares. That artificially raises demand because there is limited supply. What we are seeing already with arm is it is still above its ipo price from last week. But it has been trading down. Already throughout the day today with instacart, we will see art happens when the market opens next. When the market opens next. Haidi an exclusive conversation , the indonesian president says he wants the u. S. To play a vital role in the countrys transition to agreement economy. He will make it up top priority for his talks with president biden. He had previously inked a 20 billion climate financing deal. With regard to the gdp, i will bring this up again. So that the commitment can be implemented immediately. Indonesia wants to obtain a special tax credit for ev batteries. So that we can enter the u. S. Market. And indonesia is pushing for the Critical Minerals agreement with the u. S. To be signed soon. If this is granted as we want, of course this is good for indonesias products that will be able to enter the large u. S. Market. Shery there will be more from haslinda and the exclusive conversation with the indonesian president , talking about infrastructure and growth prospects. The riskaverse session we had, a lead from wall street, and the concerns over the stickiness of energy driven inflation. Creating caution when it comes to the opening in asia. Take a look at a mixed picture across the region. A bit of downside when it comes to sydney futures. We expect to see upside when it comes to the energy producers, oil majors, the heavyweights in trading in australia. We may see more pressure given that this is expected to weigh into the rbas decision. Same picture as we see in the u. S. The aussie dollar seeing an upside, the commodities line, the oil link when it comes to the likes of the aussie, the loonie and the kiwi. Just shy of 65 u. S. Cents. New zealand stocks on the back foot in the early part of the session. Dollaryen Holding Steady at this point. We are watching when it comes to policymaking out of china. Incremental measures when it comes to the pboc, we could see even though they kept their main rate on hold, we could see the incremental move when it comes to the oneyear prime rate to be trimmed by chinese banks. Even though we did see the pboc stay on hold. This d correlation is quite unusual. We saw that start in august. These are rates that town that tend to rates that tend to move in tandem. For that one year this is a case of playing catchup given that we did not see a move in tandem in the august fixing. That is one to watch whether or not it makes a big impact in terms of the broader uptake for credit. We have seen that some of the lowering of rates and freeing up of rrr moves has not had to the impact when it comes to lending appetite. Still ahead, the Biden Administration expected to issue an order on how the federal government uses ai. Speaking to the head of the center for democracy and technology on why legislation could be complicated. First we will be talking Market Strategy with Gradient Investments and why they think the u. S. Shutdown could be good for the economy. This is bloomberg. Explore endless design possibilities. To find your personal style. Endless hardie® siding colors. Textures and styles. Its possible. With james hardie™. Europe is slowing down, we were at the beginning of the biggest ever recalibration of the economy that we ever had. An unprecedented rate of speed. That is why there is such attraction around everything that is private debt. For private debt, the levels will be very low because unless your assumption is that we go through a very severe recession, there is not an environment where these debt portfolios will be severely impacted. It is a reasonable expectation for europe over the next year, pretty muted performance. We have seen fewer transactions than two years ago is plausible. The recalibration we talked about, we expect people to pause and figure out where valuations are. There is no doubt that inflation is impacting our portfolio, recession is coming, the question is when and at what magnitude. Haidi some of the executives we spoke to at the ipm private equity program. We wont be able to ignore Energy Prices, Mariann Montagne s Portfolio Manager at Gradient Investments. This is going to be a game changer when it comes to the outlook for higher rates and held for longer. Mariann the question is, will the Higher Energy prices, which are up 30 since the start of july, seep into core inflation . The Federal Reserve tries to ignore the inflation rate that includes volatile food and Energy Prices. But once you get the big increase in energy affecting other parts of the economy, and driving core inflation higher, they cannot ignore that. That is a big question as to how could today continue to maintain rates or drop rates anytime soon. If we do have this increase in the core rate. Haidi does it change how you invest Going Forward . Mariann i think for the time being, we are just going to anticipate rates being flat. And then i do not think we will get a true indication out of the Federal Reserve tomorrow as to what the next steps would be. We are looking at the dot plot, that his expectations but not a plan, not a set plan. And everyone will be looking for those. To down over the next those dots to come down over the next quarters. We will take away and see approach. Shery we also do not have much clarity when it comes to the u. S. The uaw strike and how long that could go for. How much does that impact your calculations about these companies that could perhaps face threats to their label negotiations labor negotiations . Mariann i am from detroit, i come from a long line of Auto Industry worker families. And i was in detroit over the weekend. I can tell you that we have never seen a big strike against all of the big three companies at one time. This is unprecedented. Secondarily, when you have on the strike, they do not get unemployment, they dont get strike pay, they get nothing. The third thing to note is that when you have an assembly job added or deleted, it affect six other jobs. It is the most Significant Impact on any part of our economy. When they talk about going from 13,000 people on strike to another 10,000, that impacts 160,000 households around this would include north america if we are talking about recent indications. So canada as well as u. S. This is a Significant Impact on 160,000 households. People have to pull back on their spending or they have to spend a lot more wisely and be choosy about where they are going to spend. Shery does that mean we need to be choosy about these companies that we are investing in, especially because if we do get more of these labor actions across the board, canada has threats of strikes. And we have seen the strikes in hollywood, actors and writers. Given that Bargaining Power seems to be moving towards workers, is this going to affect the bottom line of these companies . Mariann it will absolutely affect their bottom line. But you have to understand that honda is taking huge market share from the big three. If you continue to increase cost, that means increased prices for u. S. Autos or for from the u. S. Automakers. That gives the pricing advantage to honda and others that are not union represented. It is really a disservice in the long run. Two American Workers or workers for american companies. For them to jack up the prices, the rates, the cost of these cars. Shery good to have your thoughts, Portfolio Management consultant at Gradient Investments. We have more to come on daybreak australia. This is bloomberg. If sports fans built a streaming service. Cant believe the football season is over. Yeah. But with my stuff, we can rewatch all the games weve recorded. The minnesota comeback jjs finale. Butt punt oh, is that what the my stuff feature was invented for . Saving buttrelated content . Cause i thought it was for keeping your favorite tv shows and movies all in one place. Im sorry, mr. Sanchez. Live tv and sports. And more but mostly sports. Thats fubo haidi youre watching daybreak australia. Amazon is planning to hire 250,000 workers ahead of Holiday Shopping season. A jump from last years quota, it will span a variety of roles. Amazon will also boost the average pay for logistics workers amid a labor shortage. It comes as Analysts Expect overall hiring to stay muted. For managers of the bankrupt Crypto Exchange ftx suing the parents of sam bankmanfried. 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Golo isnt like every other program out there, and im living proof of it. announcer change your life at golo. Com. Thats golo. Com. Haidi the indonesian president says southeast asias longest economy can enjoy growth as high as 7 . He steps down next year after two terms in office. He spoke exclusively with bloomberg ahead of the launch next month of a new highspeed rail line. I am very happy and also the indonesian people are happy because the highspeed train is the only one in southeast asia. With this infrastructure, we can build a foundation of progress. Most important link, this