♪ >> good morning. a just major markets have just opened for trade. welcome to bloomberg markets: asia. ♪ >> our top stories, asian markets prepare for a selloff as china but turns from an extended break. the coronavirus stretching the nerve. beijing pledges to prevent a selloff of -- as virus fatalities mount. dozens more deaths and 2000 do

cases in the past 24 hours. >> the u.s. election has democrats appearing to face voters for the first time. we have the latest in des moines. let's go to the latest market action. what a day with china coming back online after the lunar new year holiday. what are we seeking? >> all eyes will be on the china open. it was unclear how much the pboc the quiddity injection would help shore up optimism across financial markets. we are getting some of the first indications. the nikkei still falling. for the1.8% last week worst week since august. at the same time, you are seeing the dollar stronger against the yen. some moderation there as it pertains to safe haven currencies. that after two straight weeks for the currency. take a look at the cost fee as well.

falling as well, down 1.7%. and new australia zealand markets, both in the red. u.s. futures, s&p 500 futures getting a bit today, up 0.2 percent. that after the s&p and dow took out all of their you today to gains at the end of last week. let's take a look at the fx at rates markets. dollar lowerours a once again -- the aussie dollar lower once again. near the low since 2009. you look at the 10 year, not doing much of anything. extremely low at the moment. >> fairly worrying. we are about 90 minutes away from the reopening of chinese markets after the extended lunar new year break. coronavirus case is continuing to show no signs of slowing.

the latest atoll in china has risen to 361. our correspondent joins us from beijing. this is useful if you are trying to map the pace of the virus spreading and when we might see it. the numbersred >> continue to rise. the number of cases have surpassed 17,000 with the dell reaching 361.toll there is an increasing evidence that people may be able to spread the virus without showing symptoms, which harms efforts to detect this at early stages. over the weekend, a 44-year-old man dying in the philippines, the first case of a death outside of china. you also have the first city outside of the province now issuing a quarantine for citizens. this was an eastern port city

with nine milling residences. we are seeing airlines stopping service to the mainland. more countries are blocking arrivals from mainland china with the philippines and new zealand most recently issuing new restrictions. the u.s. department of homeland security announcing that for flights carrying citizens who visited china, they will be redirected to one of several international airports. >> we have heard president trump say they have offered help to china. termse seen anything in of global coordination, especially after the who named this a global health emergency? organizationhealth it labeled as an emergency, but declined to issue any travel or trade restrictions. you have seen governments at companies taking matters into their own hands. you have seen coordination

between the cdc and china and the who winning experts into china to study this. you have scientists around the world trying to study the genetic sequencing that china shared. all trying to look for a potential antidote to the virus. the top priority of the chinese government is trying to shore up market optimism and sentiment ahead of the market open after the extended holiday. you did get a slew of measures from the chinese government in terms of booting liquidity with more than $21 billion into the money markets. you have the pboc urging banks to increase lending to the economy. that followed measures last week after china's biggest bank said it would lower -- lower interest rates. the government trying to stem this outbreak as well as trying to stabilize the financial markets.

investors should look at this rationally and objectively. >> our china curse bonded in beijing, thank you for that update. -- our china correspondent in beijing, thank you for that update. the bluebird newsroom, how specific companies may be exposed. sticking with the virus at the impact on the markets, to get some analysis from a strategist, he joins us from singapore. a big marketecting selloff at the open. you are bracing for that, especially after this chart this shows the offshore yuan at the biggest discount since 2016. once we start trading, what will you be watching? about the china market reopening today and what the pboc does, how investors

respond after the time being away. people were nervous anyway. taiwan marketsow reopened, that probably made the situation worse. when taiwan resumed after its prey, the stock index dropped 6%. that could be an indicator of what we can expect from china when they reopened. one of the problems, although the po yosi -- the pboc is rare assuring people saying it will add liquidity, there was a buildup of leverage positions in the chinese markets before they went on holiday. those people will be under pressure to reduce exposure because the market is likely to open soft and there could be calls on some of these leverage players as well. that will add to the downward pressure we may see in the china market when it opens today. something we have seen in taiwan, is it possible and the chinese markets today, people

will look at key levels as to how far the index may retreat. the csi 300, we could be looking at the 3800 area, which would be a 10% correction from the high we saw in january. that is something people may have in mind. it may go beyond that. there are big numbers to look at. will the index retreat 10% or will it be worse? will the pboc measures help stabilize things? they will be looking at what the pboc does with the repo rate. rate asy lower that they inject more money into the market? a lot of questions once the pboc gets to work today. >> a lot of questions going into the china open, including the sentiment boost to the yuan we are expecting. it is counterintuitive, but could it act as a positive

support for the currency? >> it will help. any measures which and with stability will be good for any fixingssets and the yuan will be important. the offshore yuan has not traded for several days whereas the onshore has weakened quite a lot. how far really the pboc go in trying to narrow that difference? will they move the fixing all the way up where the cnh is trading or split the difference and make it bloomberg? that is another question people would like to see. they let the markets determine ae value or stearate towards -- steer it towards a neutral level? yuanboc tends to make the more neutral when the market is expecting. get a higherbly

fixing, but not as high as the market is implying. somewhere in between the two. whatever happens, the fixing will be what today. -- will be watched today. >> we also have the pmi rating for manufacturing as well. the industrial profits number coming out today for china. a preview, when you can't more on the top story, all the day's trading action on our markets live blog on the bloomberg, you ,an get a rundown in one click always fresh commentary and analysis from our experts. if you can find out what is protecting your investments at any point. let's get you to first word news. the whitening impact of the coronavirus. it is seeing china's demand for

oil followed by 3 million barrels a day or 20%. that decline is probably the broadest shockey oil market suffered since the financial crisis. the most sudden since 9/11. it can force changes in opec policy as members consider an emergency meeting. china is the leading oil importer having surpassed the u.s. in 2016. thousands of hong kong medical workers be getting a five day strike this monday after the government reviewed demands to shut all entry points from china. of union members voted in favor of the strike to protest a lack of government measures to protect hong kong and protect its medical workers from the virus. confirmed cases of the virus in hong kong. to australia, the country walking back promises to return the budget to surplus as months of bushfires and the coronavirus

crisis saps the economy. abc thaturer told events beyond the government's control will have an impact and a pre-election budget last year, the campaign about to deliver australia's first surplus in more than a decade. theand yeah, -- to india, investorsappointed who were hoping for a stimulus to revive a slowing economy. the plan tax cuts at deficit targets failed to fix a struggling financial sector, improve infrastructure, or create jobs. and yet was the world's fastest-growing economy three years ago but expansion has slitted to its weakest in a decade. global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg.

still ahead, the 2020 democratic nomination process underway with candidates in the running. we are live in iowa later this hour. >> more on the coronavirus impact with fresh economic data. this is bloomberg. >>♪

♪ this is bloomberg markets. economic data from china would be the first to show the impact of the coronavirus. manufacturing profits are among the ratings due out today as well as trade at the end of the week. china economist joins us from hong kong with her thoughts.

at this point, as we continue to see the coronavirus spreading, we have an update on fatalities, it does not seem to have reached a peak. how possible is it to us as the economic market impact over the next weeks and months? be according to the pace of confirmed cases and especially the death tolls. nowadays, because there are more confirmed cases, the mortality rate has gone down from 4% to around 2%. unless we see this is not as fatal as before, the markets will see it negatively. >> what about the services industry? in the numbers we are expecting, we are not likely to see the true impact given that the surveys were conducted in the first half of january. where services industry

we are expecting to see the most damage? >> some of them will be. andexample, retailers ,inemas, people are not going not shopping, not going to balls. for restaurants, i have reservations. there are delivery services for foods. , unless youvices are in a business that does not , it will not be really damaging. services,auto supermarkets and deliveries, they are in better shape.

>> we did not see the impact so far in the official numbers for january that we got last week. will we see difference in manufacturing numbers today? >> i do not think so. unless there is a different survey period. it will betherwise, more or less the same. a little bit downwards. i do not think they will reflect the most recent trend of the coronavirus. policymakersen talk about support for the markets, the economy. we have seen the pboc are not aliens of dollars of liquidity. -- announced aliens of dollars of liquidity.

billions of dollars of liquidity. pboc haveime does the to act on other fronts? ¥1.2e pboc will inject trillion today of liquidity. i expect that i expected this -- i expected this. the second thing is does not -- the swineion fluid did not create inflation. due to the coronavirus event, there are some prices going down

and some going up. medical service supplies are going upward. the general trend of prices going upward, we cannot call this inflation. the pboc easing is not really in contrast with what the economy sees. >> thank you so much. coming up, we are awaiting pmi data to come out in asia. .e will break it down this is bloomberg. ♪

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this is bloomberg markets. >> we have breaking news out of the philippines. a billionaire buying a stake in manila water. manila order was seeking to billion ahead of contract talks with the government. of theve gained the ire president, coming under fire of someone accusing them of unfair contract provisions. analysts have said the billionaire is in good standing with the president and this could help manila water. the billionaire is buying a stake. >> with the democratic presidential candidates facing monday, one says he will support -- the first thing i said on the

debate stage, everyone on the stage is better than donald trump. i want to be the candidate because i believe i can beat donald trump. i can to come down on what he says he is good at, the economy. as someone who built a business from scratch, i didn't reveal him as the fate and fraud and failure that he is as a business person and a steward of the american economy. if it will not be me, i will support any democrat without any questions. >> including bernie sanders or elizabeth warren? >> absolutely. we have to beat mr. trump. that means a couple things. you have to appeal to a diverse group of americans. we have a diverse country. we have a diverse democratic party. whoever will be the democratic nominee has got to be able to appeal to the diverse group of americans and bring them to the polls. that is something -- if you look

at the early primary states, i can do. if you look at of data at a south carolina, i am doing well. ofot the endorsement today the iowa-nebraska head of the naacp. if you will beat donald trump, you have to beat him on the economy added dry a desk drawer a diverse group of americans to the paul to say this is a failed experiment, it is imperative we turn the page on mr. trump and his band of republicans. speaking with david westin, who joins us now from des moines. great to have you. the problem with mr. stier is before getting to the general election, getting past the primary elections. what are we seeing and i what? it looks like a tight race. tom steyer is not one of the leaders. soft -- imagine south carolina because he is doing better there.

maybe five., tom steyer was pointing out iowa is not a diverse state. important, the emphasis on beating donald trump. we hear that from all the democrats no matter who they are backing. the most important thing is beating donald trump. you mentioned, he is not one of the leaders. in terms of the polls, as much credit as we give to paul's, of the polls.jud over thells are all place. we had a recent pulsating bernie sanders is not -- a recent poll saving bernie sanders is number one. the real question is fully parted, do we want to go mainstream centrist or more progressive?

mainstream centrist, probably joe biden. more progressive, bernie sanders and elizabeth warren. david westin in des moines. us on our join special coverage of the iowa caucus starting 10:00 monday in new york. tuesday, we will carry president trump's state of the union address followed by the democratic response. that kicks off 9:00 p.m. in new york. coming up, fresh ratings across asia in a few moments. we will break down the numbers. what the coronavirus spreading across the world means for the economic recovery we have seen in this part of the world. little reprieve across pmi ratings. we are getting data out of china which could show the beginnings of the coronavirus and impact

across manufacturing, industrial output. later, china trade numbers as well. counting down to the start of trading in asia. this is bloomberg. ♪

watchingu are bloomberg markets. we have breaking news out of various nations with pmi numbers. 49.8outh korea, contraction. this after a rebound into expansion in the previous month. january, contraction after seven months of contraction. and then we had back down. taiwan pmi manufacturing 61.8. better than the previous month of december and staying in expansionary territory. we have seen china's official pmi numbers, manufacturing and

nonmanufacturing staying in the territory. we get the numbers later today. that is key because it was around the middle of the month when the news of the spread of the coronavirus started. we are watching these numbers very closely. haidi: it will be the precursor to what most economists are saying will be an ugly set of february numbers. you had the more positive ones. not so positive for the rest. the bank of japan manufacturing pmi dropping to 48.8 from 49.3 so that is a decline further into contractionary territory. getting numbers out of malaysia and indonesia, malaysia falling from 50 to 48.8 and indonesia for the month of january also slipping further into contraction territory, 49.3 from 49.5. it seems even without the impact

of this coronavirus, which is denting economic activity, services across the region with the absence of chinese travelers and spenders, we can see the fragility of this regional economic recovery we have had the past couple of months or so. we will discuss more on the outlook for asia's economy when we are joined by a softbank guest. >> not seeing too much immediate reaction from the numbers that as released. we were off of the lows. the nikkei had fallen as low as 1.9%. still a very steep drop, the nikkei and the topix below the 100 day moving averages. the lines of support giving way to more weakness. let's also take aboard -- look

at the fx and rates picture. it is higher than most of the g10 today. except against the aussie dollar, seeing respite for the aussie dollar. there was weakness as the coronavirus spread over the last couple of weeks. also make sure you keep an eye on benchmark 10 year treasury yields. we had fallen as low as 142 but over the last couple of months we had seen a range hold above 150. keep an eye there. i want to circle back and look at the aussie dollar because it has been seen as a proxy for risk sentiment, for china. over time we have really seen it take a hit as it compares to the as. dollar, falling as low $.67 to the u.s. dollar, being

the lowest level since march of 2009. but as i mentioned before, we are seeing some respite. haidi: it will be interesting to see how the aussie goes forward given the demand side implications for the australian economy. let's get you caught up to date with the first word headlines. su keenan. su: going to start with the chinese province of hubei at the center of the coronavirus outbreak. 56 more deaths and more than 2000 additional cases of the virus in the past 24 hours. 361 people have died with more than 17,000 cases confirmed. world health organization has reported the first death from the virus outside china, a 44-year-old man from hubei province who has died in the philippines. china has unveiled a string of

measures to aid companies by the coronavirus outbreak and pledging to reopen after the extended virus new year break. the pboc will comply with $21 billion of liquidity to the markets to prevent selloff and banks are being instructed to lend more and not call in loans in affected regions. u.k., boris johnson is expected to say he will abandon talks with a future relationship with the e.u. if he doesn't get what he wants. in his first speech since friday's official brexit, he will spell out his aims for trade talks with the bloc. you negotiators are set to publish their own and if no deal is reached, they will be forced to do business on wto terms with potential tariffs on goods. inicorruption agents

malaysia are saying they are ready, already checking graft claims around the air asia group as details in the record $4 billion settlement at airbus documents filed in the case say airbus paid $50 billion to a rports team owned by two ai asia executive as a reward for owning more than 100 aircraft. global news 24 hours a day on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. shery: another miss for india. the country's finance minister whitens budget deficit targets to help -- widens budget deficit targets. this is bloomberg. ♪

haidi: this is bloomberg markets. i am haidi stroud-watts. shery: i am shery ahn. let's get more on how markets will adjust pmi numbers. we got some from taiwan and south korea. joining us to digest the market is from societe generale. we are going towards the market opened today in china and we are expecting it to play catch-up to the global selloff. how bad could it be? >> it could be bad. we expect some selloff. the taiwanese market, the first sale of the year. area wed of big stance

could always see some mitigating and one of them would be the national team, the government institution on the large ato avoid too selloff. we could see indiscriminate selloffs. how unfortunate is it when we have expected a rebound when it comes to the eco-numbers? manufacturing pmi has bottomed out. we have started to see the rebound. we are getting the news of the outbreak of coronavirus. how could that be for the economic recovery not to mention the impact? we have really three dimensions to look at the outbreak from a market point of

view. shock.rt-term there is it is something that is going to be felt because of where the chinese economy is today. -- withple compared to the start up. be a touristo shop. at some point there is going to coming, whether it is outbreak, another disaster. this is something that by nature is transitory. tore were some things reposition the more cyclical part of the world economy and on asia. and then you have may be the most intrinsic from a market point of view but also the one on which we have the most

certainty. one thing to be the long-term consequence and the short-term. so the supply check and the need for diversifying further. the other one would be to happen from weighttail and for example.f we are seeing and i have my key, for quite some time. they are using youtube. this is something that we will long-terme stage the things. haidi: what you are talking about is the crisis preparedness . does this coronavirus crisis if you will, this scenario really kind of for open the idea some of these major global cities are

perhaps not as prepared for the situations or other types of prices and future? -- in the future? >> what we have seen is after the reaction of the chinese government has been quick. work done on entire cities. it is also where we see the economic impact to be felt further. it is not only the outbreak of the virus but also on transportation and there is no meeting between people and there is nothing that is making it andlly the production growth of the country. so the way that the city are -- g to be

haidi: getting lines from south korean authorities saying they will monitor financial markets, take necessary steps, preemptive and precise steps. we are seeing a sort of across the department response which culminated in the headline $22 billion of cash injections from the pboc. i want to show the chart which shows the current premium china a-shares are trading at. the gap has really opened up since the chinese new year break. to note in terms of valuations, there is quite a lot for a shares to catch down with when we get the reopening today? >> that is a possibility. i don't have a chart in front of has quitee premium

whitened i think. today somee possibly of this try to decrease. let's not all get -- understand that we could have in this of the one on which the government usually intervenes when there is some stripe on the market to be relatively less impacted. threat, could see less but i think at the moment what i would maybe look further would be the spread to get between a very large company and smaller company on which you have liquidity rates which have been to decrease.

haidi: interesting. thank you for joining us today. societe generale's -- joining us. and you can find out more on the coronavirus, go to tv live go for the analysis from bloomberg's expert editors as we count down for the reopening after the lunar new year. india's second budget in seven months left investors disappointed. the fiscal plan proposes tax cuts for individuals and deficit targets but fails to provide specific steps to fix a struggling financial sector. let's look at this with scotia bank's head of pacific economic. great to have you with us. what was your assessment? what report card would you give to the measures outlined? there were expectations for

more stimulative measures. in this respect it is as appointed many. it highlights the governments challenge. the economy is weak and needs support, but public finances are also fairly weak. there is not that much space for fiscal stimulus. we saw that there was slippage in the current fiscal year. now the government aims to return to fiscal consolidation next year. it is a balancing act and it is a tough situation for the economy. it is a tough situation for central bankers because the rba despite flagging growth is not expected to have the space to put another rate cut on the table this week. >> yeah. i think the reserve bank of india will leave benchmark interest rates unchanged.

there has been a fairly significant pickup in headline inflation recently. the policymakers have highlighted that inflation targeting is a key to see attached -- policy objective. there needs to be more on involvement over the next coming weeks. now you economy is so weak, once weakening,re starts relative to food prices, the ,.b.i. may need to cut further not in the mirror future because inflation is elevated but later this year. -- near future but later this year. shery: we focus on china's huge debt but looking at this chart on the bloomberg it shows how india is saddled with nonperforming loans, higher than those of china and others. even if the r.b.i. would go ahead and cut again, how much of an impact with this have in

transmitting the cuts to borrowers? >> that is a very good question. the policy transmission in india has not been adequate. it has been limited. the policymakers have highlighted that. the rate cuts will also transfer to lower gradually, but it is an issue, and the economy needs to support, but not many ways how that support can be delivered. shery: how much of this is the government actually making their own problems? high noteswith those crash band and then we had so many missteps from the government itself, not to mention they are already dealing with those restrictive new citizenship laws and having

protests because of that. we need to see strong political willingness to massive important reforms that would boost the economy in the long term. so these policy stimulus measures only affect the economy in the short term. is implement reforms that address this fundamental issues in the economy. that is how india can get back to a proper, stronger growth trajectory. haidi: always appreciate your time. countdownnext, the continues to the reopening to the onshore chinese markets. we will be telling you the key sectors and which levels to watch out for. it could be a pretty painful

start to trading in the year. this is bloomberg. ♪

change in consumer behavior, it is not so much a confidence change, but people hunkering down the issue. >> a lot of firms doing through

this and cash flow will be an issue. >> i would not be surprised first quarter gdp below 5%. >> there will be catch-up investor in q2 and q3 and we can tell people full-year gdp forecast. >> restrictive policy from the pboc. >> the pboc will do what they have done throughout the trade war and its recent problems which is to behave in a moderate and considered fashion. haidi: commenting on the impact of the virus. let's get over to our markets editor who joins us in hong kong. how bad is it likely to be given we have had a good show of force and support measures from authorities over the weekend? david: we are working with the assumption of variations of -- certainly without the offset

that was announced over the weekend which should take some of the sting off, we could be looking at a massive selloff. sharp expecting quite a catch down if you will because -- non-offshore proxies that traded last week are down between more than 4% in some cases. there is that element as well. putting that into context, it was over $1 trillion as far as the figure is concerned. are still sizable, still correct out of the pboc which sent an strong signal. there is that and i would point to the yuan fixed which should be coming out in about 20 minutes, as perhaps another forrtunity to send a signal this to be open. shery: the big question is will

the national team step in and try to put a floor on the losses and are there any specific sectors you will be tracking? >> what is being talked about this -- you will had you had this conversation in may and june during the epic work it crash, no one knows whether or not we will get the magnitude as well, but don't be surprised if we get something on those lines. it is hard to to state which whether or not they are in the market as well. it is a possibility because they have done it before. we have to start talking about a longer-term impact on certain industries. macau gaming is a good example and with that, visitors during down 80%g holiday were from the chinese mainland into

macau. you will understand you will see an earnings hit when these report. david: shery: thank you so much. our bloomberg markets anchor. you can see the macau gaming stocks as he was alluding to. you can turn to the bloomberg for more on the market response to the virus. go to this function to get commentary and analysis from expert editors. let's take a quick check of how markets are trading. we are seeing the nikkei and the topix losing ground after the rebound that came in the previous session. this all coming out of the wga internationaln emergency for the virus outbreak. every sector is in the red, energy and financials leading the losses. the losses are widespread, brought across the markets with the kospi down 1% following the kiwi stocks.

the slowdown very keenly felt here particularly on rba decision week. we have got a lot more with discussing the market impact of the coronavirus as fatalities reached 360 and china returns from the lunar new year holiday. we are speaking with the investment ceo for his views and international head of research for his reactions to that china reopen. our markets coverage does continue. we are counting down to the start of trading in hong kong. the shanghai and shenzhen. stand by for the china open. this is bloomberg. ♪ ♪ whether you're out here on lte

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is 8:00 p.m. sunday here in new york. welcome to bloomberg markets china open. down tohere counting the reopen of trade in the chinese mainland. these are our top stories. investors are bracing for a selloff at the end of the extended break. the yuan will also be under extra pressure. shery: beijing pleasures -- pledges support. dozens more deaths and 2000 new cases in the past 24 hours. haidi: one other major story we are following, the u.s. election. the democrats prepared to face voters for the first time. we will have the latest live in des moin