This is Bloomberg Daybreak Weekend, our global look at the top stories in the coming week from our Daybreak anchors all around the world. Straight Ahead on the program, we'll look to the January jobs report and how that could affect fed policy. I'm Nathan Hager in Washington.
I'm callin Hepga in London, where we're discussing snow, ice and geopolitics the twenty twenty six Winter Olympics in Italy.
I'm Doug Prisner looking ahead to the snap election in Japan and what the outcome means for the Japanese economy.
That's all straight ahead on Bloomberg Daybreak Weekend. I'm Bloomberg eleven three year, New York, Bloomberg ninety nine to one, Washington, DC, Bloomberg ninety two nine, Boston, DAB Digital Radio, London, Syrias XM one twenty one, and around the world on Bloomberg Radio, dot Com and the Bloomberg Business Appo.
Good day to you. I'm Nathan Hager. Let's take a look now at some stocks making news in the week ahead. I'm Nathan Hagar with Mandeep Saying, Global head of Tech Research at Bloomberg Intelligence. Great to have you on is we're going to be looking ahead to a lot more big tech stocks in the week ahead. What are we expecting when it comes to earnings from Google parent Alphabet? Mandy?
Look, I mean what we saw with Meta was you know, accelerating top line growth, and in the case of Google, both the search business as well as the YouTube business have I would say modest expectations going in the quarter, you know, low to mid teens growth. So, I mean we've felt double digit growth for Alphabet over the last few quarters, what was very impressive given you know, the threat from Chat GPT, But I think Meta has really raised the bar in terms of digital ad growth in
the fourth quarter. So I would be looking for accelerating top line growth at least high teens growth for YouTube and you know, low to maintains growth for the core search business of Alphabet.
Since you mentioned meta platforms, we should say that the AI spend from Microsoft seemed to spook a lot of investors last week. Given that Alphabet has its Google Cloud business, could that be a concern for investors there when it comes to AI spend in the cloud?
You're right, I mean what Microsoft Sprint has shown is you can't really miss the cloud growth numbers. So in the case of alphabet expectations, our Google Cloud will have at least thirty five percent growth. And based on the work that we have done, I mean, Google really has had some very impressive, impressive deal wins this quarter in their cloud segments, so chances are they should do better.
And remember Google has their TPUs, so they shouldn't be as supply constrained as Microsoft probably was in the quarter with the GPU situation. So my guess is Google Cloud segment would see sequential acceleration and they should be the consensus number handedly And.
How do you see Google's TPU processors fairing compared to the GPUs that we get from Nvidia.
I mean, if there's one theme that we have heard so far this earning season is AI infrastructure demand remains insatiable and all these companies are wanting to get as much you know, compute capacity as they can. So Google's TPUs, you know, are used both internally for Google overviews and across their family off apps as well as they're used
on Google Cloud. And so from that perspective, I do think, you know, Google should be able to show the most efficiency when it comes to AI infrastructure and that should get reflected in their growth margins, which I expect to be better than the rest of the hyperscalers.
We're also going to hear from Amazon this week they report their earnings. What are you expecting from their cloud unit aws?
Yeah, I mean you want to see all these cloud companies show sequential acceleration. It didn't happen with Microsoft, hence we saw that negative reaction, and in the case of Atablus, I would say expectations again are like for low twenty percent growth. So given they are the largest cloud provider, I mean they should be able to beat those numbers.
But look what we have heard so far is supply constraints are real when it comes to AI compute capacity and that may have a bearing on whether ada BLUs ends up beating those consensus numbers or not.
Is low twenty percent enough to wow investors?
No, but you want to see that sequential acceleration. So I mentioned about the size of Atablus, So that's almost one hundred and thirty five billion dollar dollar rundrate business for Amazon. Contrast that with Microsoft, which is more one hundred billion, and Google Cloud is like sixty billion rund rates so given their size, I mean, low twenty percent would be in line, but anything more than that would be impressive, and I think that would help those dock.
And along with Amazon and Alphabet. Another a in big tech reports this week advanced micro devices. How's the computer chip business looking right now? Mandy?
I mean, look, Meta just told us they plan to spend up to one hundred and thirty five billion dollars in CAPEX, which is a seventy percent increase from what they spent in twenty twenty five. So we were modeling like fifty percent increase in CAPEX from hyperscalers going into
twenty twenty six. Chances are that number will be revised upward, and so it will trickle down to the likes of AMD, which is is the you know, the second biggest GPU provider after Nvidia, and so to my mind, AMDs deal with open ai and some of the other business that they have won over the last few months should help, you know, exceed expectations when they print their results.
Does a m D need to show more market share compared to Nvidia.
I think this is such a big market that everyone is realizing that you don't need to, you know, win market share from Nvidia as long as you have a good product that you know companies are interested in buying, and open Ai has that deal with a m D. Now that is a big leap of faith in terms of MD's capabilities to supply you know, six gigawatts of power that has all a m D chips, and I think that should help them win more prize business over time.
Appreciate this man deep as always. That's Mandeep Saying, Global head of Tech Research at Bloomberg Intelligence. We move next to some key economic data in the US. Our first full look at the labor market for twenty twenty six so far comes out this Friday at eight thirty Wall Street time, and we get non farm payrolls for January. Ahead of that. We're joined by Michael McKee, our international economics and policy correspondent for Bloomberg Radio and Television.
Mike.
The theme we keep hearing from the data leading up to this report is this is a low, higher, low fire labor market. So are we expecting to see that reflected in the Big Daddy report coming out this week?
That is what we are expecting to see. The interesting thing about this report, of course, is it's the first one since the government shutdown ended. That isn't going to be distorted by the government shutdown. It's a full month of data collected and the normal processing time. So to the extent that it tells us something about where the
labor market is, it should be relatively accurate. The Fed last week, in their assessment of the economy at their meeting said that while we were still seeing low hiring, the unemployment rate seems to have stabilized, so they seem to think that things are getting a little bit better.
Okay, so how could we see that reflected in the data itself. Where are we seeing signs of studying in the labor market.
Well, the biggest is in the unemployment rate. It fell last time last month for the December number to four point four percent, and we're not expecting that to change. According to the economists survey by Bloomberg stays at four point four percent, so a sign of stability there. And the interesting thing is the December payrolls report was only
fifty thousand. Obviously we will get some sort of revision, but right now we're looking at seventy thousand is the forecast by economists for January, so that would be a little bit stronger and we saw in the month before.
But still pretty subdued compared to where we've been historically. So what could this mean for the Federal Reserve going forward?
Well, the FAT doesn't know, and that's one of the things that they're going to be looking at. The whole question surrounds all of these low numbers. Is it because companies don't want to hire right now? Or is it because they don't have people to hire? In other words, has the administration's cracked down on immigration and the ejection of people from the economy and scaring people into staying home from work. Does that mean that there are fewer
people to hire? And that's one of the big reasons that we're not seeing the same kind of payroll growth, and it's going to take a while to figure that out. We do, however, Nathan, get an update on the population estimates. This comes once a year in January, and that should change that should that will make December and January numbers not quite comparable, and it does figure to change the
labor force participation rate perhaps a little bit. So we'll be starting fresh, but also having some sort of idea of what's going on.
Yeah, there's also the big question about whether artificial intelligence is playing a role in labor market dynamics as well. We've heard that from a number of Federal Reserve speakers. Where's the thinking on that right now?
Well, the thinking is is that artificial intelligence will take a larger and larger share of the labor force, but we're not completely clear on where it is. The logical answer is that we'll see lower paid, lower skilled people lose their jobs to computers. But of course people are talking about folks in the finance industry or folks in law, especially at the lower ends, the beginning, the interns, they would lose their jobs because then the computer can do
it all. So we are expecting some sort of change, but the question is how fast. And that's where some people at the Fed are concerned that maybe we're getting ahead of ourselves in terms of the in terms of the impact on today's jobs reports, because companies are starting to adopt this stuff, but they haven't had a lot of time to figure out who they don't need anymore.
And of course there's a lot of question, a lot of focus at the White House on job growth, the whole idea of trade policy coming out of the Trump administration is that it's going to boost manufacturing jobs. Are we seeing any signs that that is starting to take hold?
No.
Since the president came to office, we've lost manufacturing jobs, and that's been one of the flaws in their whole argument. We are not seeing manufacturing payrolls go up. Now, we don't have an estimate yet for the change in manufacturing payrolls. That'll come later in the week as we get close to the release. But in December we lost eight thousand
manufacturing jobs. So there's still a lot of concern about where this all goes and whether or not we're going to see an increase in manufacturing jobs, because what tends to happen is that if a company builds a new factory, they put a lot of machines and robots and things in there, and so you don't get the additional jobs that you thought you might.
Thanks for this, Mike, As always, that's Michael McKee, Bloomberg International Economics and Policy correspondent, head of the non farm Payrolls Report for January. This Friday at eight thirty Wall Street Time, and coming up on Bloomberg Day Break weekend, we'll look ahead to the twenty fifth Winter Olympic Games in Italy. I'm Nathan Hagert, and this is Bloomberg. This is Bloomberg day Break weekend, our global look ahead at the top stories for investors in the coming week. I'm
Nathan hager in Washington. Up later in our program, we'll look ahead to a general election in Japan and we'll focus on a policy decision from the Reserve Bank of Australia. But first, the twenty fifth Winter Olympic Games kickoff in Italy in the next few days. Though the event promises fireworks on the sporting stage, could diplomatic tensions between the US and Europe threaten to upstage the proceedings for more. Let's go to London and bring in Bloomberg Daybreak europe Banker Caroline Hepger.
Nathan, I'm tempted to say that delivering the Milano Cortina twenty twenty six Winter Olympics maybe as tricky as pulling off one of those wild stunts in the freestyle big air competition. The Olympics is meant to be unifying, of course, but it can also serve to highlight geopolitical tensions between countries with concerns often about sportswashing. Then there's the issue of delivering the event, including all the venues in the Alps,
on time and in some ways sustainably. For this Olympics, which begins on the sixth of February, followed by the Paralympics a month later in March, there has been considerable attention and protests by Italian officials over US plans to
deployed some ICE staff to this year's event. Bloomberg understands that ICE agents will be in Italy as part of the security details for the Vice President JD Vance and Secuy of State Marco Rubio, according to an official from the US Secret Service, but the agency's role in an immigration crackdown at home is stirring opposition overseas.
Now.
This year's Olympics is also said against the backdrop of increasing division between the United States and Europe. Recently, the NATO Secretary General Mark Rutter told the European Parliament that the Transatlantic Alliance is vital to the region's survival.
So when President Trump is doing good stuff IV operation, and I don't mind him publishing text messages, and if anyone thinks here again that the European Union or europerson Hall can dissent itself as out to us, keep on dreaming. You count, we count, We need each other.
That was NATO's Mark Rutter speaking there so well. Italy's Winter Olympics feature more ice than they bargained for. Joining me now to discuss is Bloomberg's Milan bureau chief Tomaso eb Haarts. Tomaso, let's start by thinking about these Winter Olympics taking place in the Alps in the next few days. I suppose the first big question, and maybe it's always the case for the Olympics, are all the venues going to be ready?
So those games will be spread all over the north of Italy, not just on the Alpso the main city where the opening ceremony will be Friday is Milana. And then you're going to have the different sports to be held in different locations. Fortina where you're going to have the women's ski races, You're going to have in Lombardy, Bormeo, You're going to have games also in the Suti Role region.
So what is interesting is that somehow to reduce the cost of the Olympics, they have been spread ref location where essentially most of the venues were already built and ready. For example, the Vietnam will be held in anter Holz, which is already one of the most famous locations in the Alps for this kind of sport. There are some new venues, especially one Milan for highs hockey, which was just completed. There were just some criticism about how is it built, about the quality of the eyes, but it
looks like it's almost ready. If you walk around the city in Milan, you see a lot of temporary building that will be used for the Olympics. While what I'm hearing, for example that in Cortina Adam Pazza on the Alps, not all everything that was meant to be built for the Olympic is rady, but for sure the infrastructure there was a huge investment in infrastructure. This is what probably was the most important investment for those Olympics.
It's also really interesting Olympics because it's one of the first times in a long time that a Winter Olympics is going to be sort of within easy reach of US scheduling. And yet maybe a lot of the build up to the Winter Olympics is going to have been dominated by this spat, this disagreement around ice agents maybe or staff being involved in the Winter Olympics somehow, maybe just to protect high ranking US officials who are going to be visiting. But there's been quite a lot of
pushback about it. Can you describe how the Italian government's been handling it?
In the last week was a high hab on the debate in Italy the involvement of ICE in the Olympics. There were some Italian official or protested but vigorously, including Milian Mayor Giusepe Sala who, following the latest involvement of ICE in the US I, said they're not welcome in Milan. Then for days Italian official somehow tried to keep the situation under control until there was a meeting between the
Italian Interior Minister and the US embassy in Rome. After that it was clear that ICE agents will be involved just within their domestic offices, so that means they will be deployed in the US consulate and this somehow as a calme a.
Little bit attention.
Some Italians are protesting clearly, and the Italian government had larified which will be the involvement of ice in the in the Olympics, And I have to say that clearly. The news great a lot of attention.
Yeah, and Georgia Maloney of course, that the Prime Minister is often seen as a Trump ally. I suppose there's also maybe a question that whilst the Olympic officials want to present this, want to present sports, as is so often the case, as a kind of unifying message, there's a danger that it will highlight the divisions between Europe and the US that we've seen, you know, geopolitically. That's going to be surely quite hard to handle.
Clearly, Maloney is seen as one of the European leader closer to Trump. She is a key figure at the moment in europea also because of the hair closer ties and other with the Trump. That doesn't mean that they are always on the same bench. For example, on Greenland, Maloney was aligned with the rest of the European leaders while answering to Trump's request. I think that what you said is clearly an interesting aspect during Olympics, not only the Olympic committee, but you know, the buzz should be
on sport and not on a geopolitical tension. But you know, we're living quite i would say, a very interesting time in terms of geopolitical news. If you want to call them interesting and so clearly this is part of the public debate and will be also during the Olympics. For sure, the eyes of the world will be on Milan for the opening ceremony and then on the out for the Olympics.
No doubt, I'm sure people are also getting very excited about it to watch. I mean, what are usually just spectacular events, aren't they The acrobatics and the kind of area display snowboarding and skiing and so on, which sort of brings me to snow. The other aspect of this is that climate change is affecting the Alps so deeply, and there's been a lot of anticipation about how much
snowfall has been arriving. You know that there's been in the days leading up to this, and the creation obviously of fake snow you know where you kind of generate it for the ski slopes. Climate change is also huge good news.
In the last couple of week there has been heavy snow falls on the Alps and on the Dolomites that were still start in summer mood until a few days ago, So there will be white Olympics. It's quite happy, but for sure, as it happens nowadays quite often in the Alps that most of the snow which was prepared for the Olympics was the snow that is also been prepared for tourists, because you know, the ski industry and the
tourist industry is crucial. The atmosphere is changing, the altitude, snow is usually expected and it has some costs because if you want to ski and the reason not no, then you have to make the investment. And this is clearly a consequence of the higher temperatures we are seeing lastly Tomas.
So what do you expect in terms of the economic impact of the games. There's also been this idea of sustainability. How do you make the Olympics every four years, whether it's frankly winter all summer, a bit more sustainable. You've sort of talked about that with the reuse or the using of current venues, but the economic impacts, what do you think?
So one of the main aspects of these Olympic Games, this winter edition is that to avoid building new venues just for the Olympics that you won't be used anymore. That's why the games will be held in almost ten different locations where you already had the infrastructure ready in Italy. We headed the Olympics, the Winter Olympics in two thousand and six in a Turin and the Piedmont region, and there are some venues, especially one for the bob was
not being used since those Olympics. So the plan has been since the beginning to avoid this reason. That's why you're going to have the games in very different locations, so the cost will go down, and there is also a matter of sustainability. The impact of the games. We're talking about five billion euros revenue and investment for the Games. The impact in this country is that essentially the Games were used to create new infrastructure, for example, road infrastructure
to go to Cortinada and pets. A couple of new chunnels were just in agreat a few days before the Olympics are starting. So it's a way somehow to boost infrastructure in Italy, which is one of the main issues of the country.
Yeah, absolutely great. Britain sending fifty three athletes the United States more than two hundred. Italy has actually got close to two hundred athletes are going to be going there. But as you say, tourism numbers will be something that will be watched closely. It's a huge platform, isn't it for Italy. Tomaso, thank you so much for being with
me being interesting few weeks. Thank you, Jow Bloomberg's Milan Buia chief Tamaso Ebhart, and we'll be bringing you any interesting news stories from the Olympics sixth of February to the twenty second of February, of course, in the coming few days. I'm Caroline Hepka here in London. You can catch us every weekday morning for Bloomberg Daybreak. You at beginning at six am in London. That's one am on Wall Street.
Nathan, Thanks Caroline, and coming up on Bloomberg day Break weekend, we'll look to Japan, where a general election is set for February eighth. I'm Nathan Hager, and this is Bloomberg. This is Bloomberg day Break weekend. Our glob will look ahead at the top stories for investors in the coming week. I'm Nathan Hager in Washington. We go to Japan next, where a general election is set for February eighth. Prime Minister Takaichi's Liberal Democratic Party is likely to increase seats
and gain a majority in the lower House. For a look at what the outcome could mean for the Japanese economy. Let's go to Bloomberg's Doug Krisner, host of the Daybreak Asia podcast Nathan.
In late January, Japanese Prime Minister take Ichi dissolved parliament and called for a lower house election. It is now set for February eighth. Now, markets have already expressed a bit of unease. To help us understand what's at play, let's bring in Bloomberg's Paul Jackson. Paul as a member of the Eco gov team looking at Japan in South Korea. Thank you for being here. Can we begin with a backstory on how we got here and why take Ichi called for this snap election.
The ruling party in Japan, the Liberal Democratic Party, has been struggling to hold on to power in recent elections. Votess are very unhappy about inflation. It's the first time they've been experiencing inflation in a generation. It's putting a lot of pressure on households and they're wanting the government to kind of take control of this. Also, we have a country that's surrounded in Asia by various security concerns, and since she became prime minister just three months ago,
she's been riding high in the opinion polls. Now you could think it's a bit cheeky to go straight to the electorate when less than a quarter through your leadership, but she's clearly trying to take advantage of those high opinion poll ratings and the idea that look, I am
a leader with identity. I can be more assertive as a leader in Japan, and I can make Japan more assertive, give more identity to Japan, and really Takeichi is gambling on this personal appeal to the electorate in the style of formerly like Shinzo Abbe and Junicio Koizumi, to appeal directly to the electric rather than through the party and get people to vote for her. And she's put her career on the line because imagine if she doesn't extend a razor thin majority that she's got at the moment.
I mean, she's she's literally one seat majority at the moment on two three three in the more powerful lower house, and she said that the goal is to extend that majority, and if she doesn't, then she's likely to step down.
So among her objectives you mentioned how inflation is affecting the average consumer in Japan. She has proposed a tax cut on food. Is that right? Is that a part of the strategy?
That is a part of the strategy. And the ruling party has been very reluctant to go down this path in previous elections, even though pretty much all the opposition parties have been calling for this or something similar related to the sales tax. Instead, she's embracing it and saying no, no, let's do this. We'll do it temporarily, We'll do it for two years, and it's to reduce an eight percent tax on food down to zero during that time. Now that sounds okay so far. There's going to be a
loss of revenue. This is not on the scale of some kind of like the former UK Prime Minister Liz Trust. It's not that kind of scale of loss of revenue or tax breaks, but it is a significant amount of It's five trillion. How are you going to pay for that?
Now?
The problem is for two years that doesn't sound too bad. But can you then politically raise or return the tax back to eight percent? Now that's something policymakers have had difficulty doing in the past, and I think that's why markets have been on edge about the outcome of this.
Election, So you alluded to a little bit of the geopolitical tension in the neighborhood. Right now, I'm thinking of Takiichi's comments regarding Taiwan and how that offended Beijing. When it comes to the issue of military spending, I know that Japan has a passivist constitution. Is this something that we should look for that there may be a little bit more money allocated to defense.
I think it's certain that Takeichi, she wins, will continue to ramp up defense spending in Japan. One of the first things she did when she became Prime Minister was to bring forward a target of making defense spending a two percent of annual GDP. Now that figure is based on twenty twenty two GDP, so it's a little bit out of date, but she brought forward that target by two years, so she's already ramped up defense spending and
is essentially promising more. We've just had elbertge Colby in town, and obviously he's one of the main advocates for US allies ramping up their spending, and the kind of message that Takaichi has been delivering is kind of music to the ears to the current US administration. I'd say, what.
About the issue of immigration and the growing presence in Japan of non Japanese.
Well, we have a record number of foreigners now working in Japan. The numbers have gone up again, and this is a concern for those pockets of Japan where you have large concentration of foreigners working either in manufacturing as also much wider use of foreign workers in retail as well. And for some voters this has put them in a
position of uncomfortableness. The sudden influx of people from other countries while they're feeling that their kind of take home pay with the inflation, and that the costs of that are running the households each month is getting tougher and tougher, and yet people are coming in from abroad and getting work. So for a certain segment of Japan's population is making them feel very uncomfortable and beleaguered and like, hey, wait
a minute, what's going on. Don't forget We've also got forty two million people visiting Japan last year, a record number of foreigners entering the country and go to all the tourist sites and clogging up some of the main cities. For some Japanese, this make them feel really awkward, and they've been voting for some other parties, including the far
right Sanseto on that specific issue. So TAKH has been giving some more robust kind of policy views on what to do in terms of regulations and rules concerning entry and foreigners in Japan and also the key element of regulations on buying property by foreigners in Japan.
Is there a robust debate when it comes to how tourism can benefit the economy.
I think that since both the time of Koizumi and Abbe, the idea that an increase in tourism Japan can help the economy has been one of the key kind of elements as a growth, not the main one, but certainly a significant one, and we've seen that really escalate in recent years.
Paul will leave it there. Thank you so very much for helping us preview the election in Japan. Bloomberg's Paul Jackson. He is a member of the ECOGUV team looking at Japan in South Korea. So the other event on our radar for the week ahead is the policy decision for the Reserve Bank of Australia. To provide some insights, let's bring in Bloomberg's James McIntyre James as an economist for Australia and New Zealand at Bloomberg Economics. Thanks for being here.
Can we set the stage by looking at the story on inflation down Under in the last week, the market's got a very hot reading on CPI. Do you think that's going to impact the thinking of the RBA.
We've got a very very strong CPI outcome that came through for the final quarter of twenty twenty five. What's been happening in Australia is that the Statistics Bureau was finally, after many many years of effort, moved to a monthly CPI. But we've got a transition going on in this data and it's resulting in a lot of very volatility and sticky moves. So it's going to be a tough one
for the RBA to analyze and take on board. But what they do if we look at the headline figures out of it, especially this trimmed mean measure, which is taking out some of the volatility out of the data, and it's the measure that the RBA has reinforced that they will be looking at the quarterly trimmed mean measure for the RBA came in at zero point nine quarter on quarter in three point four year on year, and
that's above the top of the RBA's target band. Two to three percent is inflation angling for two and a half percent midpoint is what the RBA is targeting, and inflation has come in at three point four percent. Instead of gradually moving back, it's ticked up. It's resulted in market pricing and expectations shifting from maybe the RBA entertaining
a hike. At this meeting, we're a little bit more cautious, but that's really set the scene for what the decision is going to be at the RBAS for every meeting.
So, James, what was driving the increase in inflation in terms of the factors here involved? Can you kind of pinpoint a couple of the key problem areas.
One bucket of problem areas within the inflation basket is the thing that local Australian economists refer to as administered prices.
So what is that.
Well, it's prices within the economy that are influenced by government decisions and regulatory dictates and the like, So things like electricity prices, school fees, these sorts of things are sort of set either quarterly or annually. You know, the cost of a posted stamp. They're regulated by the government.
And what we're seeing here is that we're seeing market driven inflation, the parts of the inflation basket that are a bit more responsive to private decisions and supply and demand within the economy that's continuing to edge downward, but a lot of these government related or administered prices really spiking up. And so what's happened in the third quarter and in the fourth quarter is that we've seen a bit of a bump. The RBA referred to it as transitory,
but it's going to test their patients. We've seen a bump in electricity prices, We've seen a bump in property rates, and a couple of other things that have really pushed that administraive prices basket way up.
So if there is now greater risk of perhaps a move, maybe not next week, but at some point in the near future, that we could see a rate hike from the RBA, what might that do to the overall performance of the Australian economy.
Well, if the RBA does decide that they want to react to this and take out what could be described as an insurance hike to make sure that the inflation genie does sort of go back into the bottle, because it looks like it's poking its head out just a tiny bit. What it would mean is it would see a renewed, I guess, suppression of the recovery on the private sector side of the economy. But what an RBA hike would do is it would just put a little bit of a wet blanket on that another thing that's
potentially weighing a bit or dampening the economy. It might be one of the reasons the RBA might be a little bit circumspect and be prepared to look through what it sees as this transitory inflation spike is the currency. It's the Aussie dollar has shot up quite a bit some of it. You know, there is this big divergence between market pricing for the RBA and market pricing for the FED, and the currency is responding to that along with the general US dollar story underway. Commodity price is
a little bit firm. Gold price Australia is the largest third largest i should say, gold exporter. You know, these things are all a bit supportive, whether it's interest rate toferential commodity prices or the overall tone within global markets when it comes to the US dollar and all of that's going to put some you know, a bit of a dampener on demand in the economy, but also a dampener on inflation imported prices. Australia does import a lot
of goods. A stronger Australian dollar is going to put some downward pressure on those and so it really is adding to the story here that this could be something that the ABA does look through.
Okay, James, we'll leave it there. Thank you so very much. James McIntyre, economist for Australia and New Zealand for Bloomberg Economics, and I'm Doug Chrisner. You can catch us weekdays for the Daybreak Asia podcast. It's available wherever you get your podcast.
Nathan, Thanks Doug, and that does it for this edition of Bloomberg Daybreak Weekend. Join us again Monday morning at five am Wall Street Time for the latest don markets, overseas and the news you need to start your day. I'm Nathan Hager. Stay with us. Top stories and global business headlines are coming out right now.