>> welcome to bloomberg markets: asia. i'm paul allen in sydney. we are counting down to the major market open. >> here are the top stories we are covering in the next hour. south korea raising the infectious disease list. more than 600 people are confirmed to be affected by the coronavirus. down -- early.

the outbreak has risen to 130. and g20 finance ministers and central bankers brace for the economic fallout. let's take a look at the markets. we had u.s. markets closing .eaker on friday we have new zealand trading at the moment. it's looking weaker at the moment by two thirds of 1%. half income declining to $185.8 million. the yen is gaining a little bit of strength against the greenback over the past 24

hours. but the u.s. dollar is still looking pretty strong. the world health organization says no new countries reported of the coronavirus. we have yvonne man in hong kong covering this story for us. south korea was among the nations performing during the search. what is the focus? , it seems that the focus is to prevent a global pandemic outside of china. to six.h toll rising total cases topping 600. as you mentioned a 20 fold increase in five days and half of those cases seem to be tied to this religious group where had infected all

patients in a psychiatric hospital after attending a funeral in the same complex. countries like the u.s., the u.k. in israel raising their travel advisory. when it comes to europe it seems like this coronavirus outbreak seems to be spreading to the -- italy hit in the northern part of the country. you have 50,000 keep -- 50,000 people southwest of milan after the second reported death in the country. businesses and restaurants are closed. matches.soccer the eu saying these extraordinary measures in dozens of these towns in italy is essential to eliminate the outbreak and may need to be

replicated in other countries as well. >> let's talk about what's happening in china. case number seemed to be stabilizing. essentially present xi jinping stating that there is more policy in the hype line. saying that they would adjust policy to ensure that they meet these economic goals and targets for 2020. he says that he wants to see production restored in an orderly manner and he wants to see output in those provinces that he describes as lower risk. ground are seeing on the

is that things are starting to pick up. we are seeing an uptick in power consumption by 7%. full capacity is between 50 -- that was about 40% to 50%. you have these examples of the wholesale congress opening earlier than expected but many businesses struggling with those supply chain constraints and getting people into work. we also heard from the pboc saying that the central bank does have the policy tools at their disposal. the economic fundamentals remain. toolso have those policy at their disposal.

>> we had g20 finance ministers discussing the response to the outbreak. what do they have to say? we have lost yvonne man, apparently. the virus is starting to put chinese firms at risk. what's happening? >> it is. even as the central bank they say they went to see the output revived and capacity. we are seeing the reality from small to medium-sized enterprises which is that they still remain in a difficult position when it comes to access to financing stop the central bank is taking these targeted measures, but the reality is that it is a tough situation.

there was a survey that suggested that as many as one third have just enough cash to keep it going on their balance sheet for one month. in terms of the ability for the balance sheets to soften the to icbc andspoke they have given low relief to just 5% of their clients. it's not a big surprise when you look at the ratings which says if the coronavirus has up along impact on the economy, you could see nonperforming loans triple. in the last four years you have seen defaults ticking up to record levels. is that theto that government is telling them to ensure they are getting loans and liquidity.

the sectors that are most at risk according to our analysis are retail, restaurants, airline , travel. the rank -- the banks are reluctant given the bad loans that they already have on their books. get back to this g20 finance ministers meeting over the weekend. much has been discussed in response to this outbreak. what was the conclusion? >> they spent a lot of time response ont the this coronavirus outbreak. when it came down to the final communique, it was only mentioned once. a menu of policy options but gave few details when it came to a global coordinated response. they did say that the downsized

risks will persist on the economy. speaking of supply chains, watch the samsung stock today. after aneen shut down -- this may impact some of the production of the high-end models. the company is saying they have shifted half of the business to vietnam. >> yvonne man in hong kong and tom mackenzie in beijing. we begin with japan ask about response to the coronavirus. the bank says it is well-prepared to act if it is needed to address the virus. said he is not

afraid of the outbreak ask about effect on inflation. were -- a low on the dollar last week. after the biggest contraction and's to any 14. and the impact that it is having on its biggest trading partner in china. bloomberg, the treasurer said the impact on the tourism and education sectors will be watched closely. about 100,000 students have been unable to begin university classes. onwe are seeing an impact this in terms of international students to major sectors across the economy.

chinese factories are remaining closed. we will continue to monitor the situation. >> hardliners have won a majority in the parliamentary election. conservatives swept to victory in tehran and other cities. there appears to be a rejection of president rouhani's engagement with outside powers. to the u.s. on the political front bernie sanders has taken the lead on the democratic race to unseat president trump. he won that nevada caucus. joe biden was second. with justuttigieg over 15%. saying they noticed

errors inconsistency. day,l news 24 hours a powered by more than 2700 journalists and analysts. this is su keenan. come, we get the market from jean bailey. but how the coronavirus is affecting her investment decisions. plus we speak to an infectious disease expert to get more on their response to the outbreak. this is bloomberg.

>> the interest rates are out there and we already saw them being cut. usually, central banks are the speedboats. >> monetary policy has already done their part.

on the fiscal side we are preparing for practice, how to stimulate consumption. support, weools to use the tools that we have used in the past with change in the industry. but my economy in this case should come from the supply side. >> the countries that are saving money because they are paying lest interest on the debt because interest is historically will use that capacity. >> we continue to monitor that situation but we do know that the economy is resilient. >> these are the g20 finance officials discussing the impact

of the coronavirus outbreak. .et's turn to the market now ofhave a laundry list there concerns and difficulties with the coronavirus. chart on look at this the bloomberg. everybody continues to rally and we mean everything. is this supported by the fundamentals? in the lastst drive for asset prices is really the key. we have liquidity pumping more .heap money into the system that's around the world in china, u.s. australia. the industry is supporting asset prices around the world. the fundamentals in the last few years the growth has been downgraded. this year it was looking pretty

good, until we had the coronavirus hit, and it looks like growth will be downgraded. but central banks are there to pump more liquidity into the system. >> we are seeing the economic impact of this continuing to spread. we have another chart on the thatberg era suggesting pmi data is falling away. on theid it will sit sidelines. at what point does the picture change? >> we believe that first quarter gdp will be downgraded quarterly . on the sharp disruption caused by the virus. to determine-- yet how much economic impact it will be. the first quarter will look very weak. based on the previous virus

experience, that is normally pretty quick. as soon as we see the worst case, worst extent of the impact you expect the market to snap back quickly. i've done is indicated very clearly the growth. withcannot actually go out big bank stimulus because they do not know at this point whether the virus can be contained. the minute that they have confidence to do so they will step up. talk about your strategy in this environment. >> i assume you're not buying anything. i know you like health care stocks. health care liked for quite some time. before the virus hit, they were looking very strong on the

outlook in growth. the virus had impacted the short-term outlook so these sectors are being sold off. sector is ripe to be a leverage to the upside. >> how about in terms of emerging markets? u.s. dollar is incredibly strong right now. have you seen anything that you like? that the still seeing ,orst impacted region is china and that market represents a lot of volatility at that point. but what is stopping us at this point is the impact of the virus. whether thenow mortality rate will remain low. could take a few months but

it is getting closer. >> i want to get your thoughts on dollar strength. safetydollar represent and defensiveness. the risk goes people are fearful for the outlook around the world. that dollar strength will be maintained, but my view is it won't be long until you are better to start looking elsewhere. >> you can get a roundup of the stories you need to know to get your day going. today's edition of daybreak. bloomberg subscribers can go here on their terminals. you get the latest on the assets that you care about. hathawaycome berkshire continues to pump up the alienance of its 248

dollar stock portfolio.

paul: i am paul allen in sydney and you're watching bloomberg markets: asia. sot tobuffett and justify the importance of his stock portfolio claiming his investments were more than just dalliances with the companies he takes a stake in. on the phonens us from new york. buybacks from warren buffett. no elephant-sized acquisition. what were the highlights? onhe spent a record amount buybacks. while that might not be a record for many companies it is pretty big for berkshire.

their shares face the worst underperformance since 2009 last year. it's this feeling that he is trying to search for ways to put work, even though record amount on buybacks, his cash sat at a record level. >> a is not getting any younger. we have heard more about these plans. we going to hear more in the future? >> this is one of the more interesting parts. people have told him he needs to let his key lieutenants have

more time speaking in front of investors. he said shareholders will be able to direct questions specifically to those individuals. tweak that i think that it has a huge importance to berkshire. investors are clamoring for a little bit more taste of what it's like to be a manager at berkshire, and what those individuals are like. paul: the tone of the letter was more humorous. it is a new warren buffett we are seeing? >> it took a little bit of a different tone. part of the letter was actually dedicated to mourn buffett talking about his will, and how his shares will be apportioned after his death.

that took a darker tone. and it was more businesslike. i talk to investors and had this feeling that there weren't as many of the folksy quips he has been famous for and he did steer clear of politics. that's a market change from the letter released in 2016. he didn't bring it up it up at all this time. >> it seems that he is also trying to defend this policy of buybacks. >> he does talk about buybacks. policy, and he has taken this town that we will do them when the price is right. if they have $20 million in shares, it's kind of an interesting tone of buybacks. he's not as eager as some companies but willing to do this

as long as there is a great price. that's the bloomberg finance reporter. thank you for joining us. let's get a quick check on the berg business flash headlines. the impact of the coronavirus to 47ee a hit of 22 million u.s. dollars. they have been reported as being severely affected along with the domestic market. new zealand has four -- full-year earnings in 2020. chinese planning to buy online snacks retailer otherwise known as be in cherry. mexico is looking to expand in china. they are one of china's largest companies.

we are counting down to the markets here in sydney. futures currently pointing 0.6%. by about this is bloomberg. is bloomberg.

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morning30 a.m. monday in sydney. futures are pointing weaker, .6%. .26 -- the asx old tech index is going to start trading. -- all tech index is going to start trading. paul allen in sydney, and you are watching bloomberg markets: asia. let's check in on first word news. su: we start in south korea. the president has raised his countries -- country's infectious disease level to its highest after 600 people were confirmed to be affected.

that is a 20 fold increase over the past five days. six people have died. moon jae-in has ordered schools shut across the country after the holiday break and the central bank is due to hold an emergency meeting later this afternoon to consider the economic impact. chiefs and central bankers see the downside of global growth persisting amid the coronavirus outbreak. despite spending much of their time in riyadh discussing this, their final statement provided few details about a coordinated response, other than to say they would enhance risk monitoring. china's representatives were absent. mines and most coal refineries have resumed reduction. they had shut down much of the production to cope with weaker demand and a lack of workers.

any negative impact on the coproduction has been basically erased and demand for coal power, oil and gas returns to normal as more companies resume operations. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. paul: let's take a look at how markets are trading in this part of the world. we have had new zealand up and running for 90 minutes. to theis heading south tune of .9%. u.s. markets closed weaker before the weekend. in australia we look set up for a slightly sluggish start. it is off .6%. theyen has gained against u.s. dollar, 111.52. the aussie dollar has lost about

2% the past month, holding on above $.66. let's preview the market action in asia. we have got david ingles with us and adam haigh in sydney. the coronavirus, still weighing heavily on markets. how are investors assessing it? weekend development has been italy and south korea. it shows to what investors are not willing to do with the constant uncertainty. you see the big move in the risk-free assets, treasuries of the world, and the dollar which has been where all the money is flowing in. you are starting to get big levels breached on the short end government debt yields but the longer as well, hitting fresh records on friday on the 30 year treasury yield. some of that as well, the reminder for investors, the

economic data continues to be flashy. in the u.s. it was pretty poor and surprised a lot of people. as they return to desks on monday, they see escalation in places like italy where the schools are shut. an important carnival in venice is canceled. italians don't stop playing football unless things are serious. on thes a lot going on international front and the escalation of these cases which continues to make the case that you want to dial down risk exposure. yields sinkinge towards historic lows. parts of the curve flirting with inversion. what is your take? it is the last symptom that shows we are moving into unprecedented territory as far as europe is concerned. for all of this started

five weeks ago, the story of the narrative was china was going to slow down. and in the second order effects are getting priced in to their trading partners. , think the narrative will be because of what happened over the weekend, it is not what happens if we get similar skill, not to the extent of china but when you look at crisis is intro -- the crises in korea and italy, how do those economies deal with the economic fallout? china is probably the economy that is built as far as decision-making is concerned, to deal with short-term economic crisis because they are behind all of the policy moves. you look at where futures are, we are pricing in 50 basis points of cuts. two.gine that would be

as adam was pointing out, the uncertainty is pushing down yields and it is to make rockets rethink -- markets rethink or bring forward expectations of easing from central banks. korea, one market that will be exposed to what is going on. you will be watching that closely this week. what is happening? david: there is an emergency bank of korea eating today. that will take place towards the afternoon, 3:00 local time. there is a rate decision this week towards the latter part of this week. it is close to begin with. six or seven economists saying they are going to cut more or hold. as of late last week, not even considering whether they will be revising those forecasts down,

because of what happened over the weekend. when you look at the last meeting of the bok, you have two dissenters calling for a rate cut. so i mention it will be close to watch when that takes place. don't be surprised if the bok starts talking about easing. korea, thed on fromn won is about 1.5% pushing back to levels in 2016. the way 10 years. paul: one huge beneficiary is gold. what is the outlook for gold price? adam: gold is that traditional asset you want to look at four times of inflation and there isn't much inflation.

people have been adding to go positions because of the broad-based uncertainty and the way the coronavirus is unfolding. the chart shows you the extent of that move we have had looking at the earlier wave levels. it is important to note during the rally we have had all the the technicals might point to a pauseterm hold back or a in the rally, because there continues to be uncertainty and people want to find these assets like treasuries and the gold market that give them protection, there is no reason to suggest technicals can't removed to the side and the strength continue. a lot of it will depend on the policy response. one of the key takeaways from the g20 finance ministers meeting is there is a day clear plan for aear coordinated response. they did have an opportunity to do that. you haven't seen that in the

communique. i think that speaks to the risk off moves we see in markets monday morning. there continues to be a great level of uncertainty. thank you very much. you can check out our library for some of the charts we have been talking about. can find it on gtv on the terminal. let's stay with concerns about the spread of the coronavirus. an epidemiologist joins us now from melbourne. ofant to get your assessment the changing diagnostic tools china has been using when it comes to supplying numbers of coronavirus cases. >> it has been hard to keep track of what is being counted for the virus. certainly initially they were counting severe cases but also have virus detectives. that would be the tip of the iceberg.

and then they switched to capitalist terms including cases that had something that fit a clinical picture. and in other parts of china, applying the diagnostic tests. it is hard to track the numbers. that does happen in an epidemic and it is not unusual in the to expectpidemic different case definitions along the way. it is learning on the job and many of the factors is the incubation, because we have had reports of people getting sick after 14 days, having displayed no symptoms. is the incubation well understood? >> because it is a new virus, we have an open mind, but the overwhelming majority of the evidence is the incubation is

probably around a week, up to 12 days. i still think 14 days is pretty conservative reasonable. the people have got sick beyond that, you have to say maybe there are people who are outside had period, or they have an interim exposure they haven't recognized so there incubation period is shorter. paul: we have any understanding or is it possible to predict when the number of cases might peak? >> it looks like it is going up at the moment. you have been discussing south korea. there are lots of countries in the world where case number's are beginning to take off. what is more likely is we are going to see cases in our countries. we will see that increase in case numbers. i think the thing is months away. the number of cases

reported continues to increase with the fatality rate is somewhat steady. is it your expectation that will continue or is there a possibility the virus could become more deadly? >> any mutations becoming more severe. the initial reports from hubei province were for a high mortality rate. the counter was very severe cases to start off with. as it moved out and out of china, we are seeing cases are quite mild and the reality is lower. -- fatality is lowered. you have to be careful about being too definite. cases will progress to getting worse and and up being fatal. it looks like it is settling

around the 1% mark. paul: how about transmission? we see any images of people in masks. there is someone on our screen right now. is there any point in wearing a mask if you don't wear gloves? >> it is droplet spread so hand hygiene is important which would be about keeping your hands clean and washing them while using sanitizer. masks are appropriate in a health care setting and in limited settings. i am not sure they will make a big difference in the community because it is more when you are in a confined space there is a different case and you are wearing the mask for a limited time, you can expect it to be effective. people will -- certainly are wearing them out there. we are just getting news of ontario government in canada confirming its present of case

-- presumptive case. point.lustrates another most of it seems to be confined to countries which are experiencing northern hemisphere winter. drawconclusions can we from that? does it not survive in warmer months? one sort of coronavirus is the common cold which is in winter. it is possible it could be a winter virus. we have not had it around long enough to work out seasonality. i think it could spread in i have seenw but how the concern will be in winter, with the flu season, which is looking likely. paul: and we are used to seeing flu vaccines being made available but how long would it

be for a coronavirus taxi becomes available? >> that is a good question. i have heard some optimistic estimates. the who is saying more on 18 months, which for it to be in full production, which seems more realistic, and this state it is impossible to say. but certainly people are working hard to get something going. paul: thank you for your time. we will have more analysis on the spread of the coronavirus in the next hour. forave the research fellow public opinion program. this is bloomberg. ♪ this is bloomberg. ♪

paul: i am paul allen in sydney.

bernie sanders has been laying out some of his foreign policies after his big win in nevada. he said he would meet with adversaries including kim jong-un. what does all of it mean and what would his foreign policies look like? let's bring in ros krasny. what exactly would bernie sanders' foreign policy -- in what way would it be different to president trump's? ros: bernie sanders is known for his opposition to the iraq war 18 or 20 years ago. he has focused policy proposals on domestic policy. his foreign-policy is a bit of a mystery. he said in an interview he would be prepared to sit down with dictators. he is similar to trump who has met three times with kim jong-un. bernie sanders said i will be more prepared than trump was. it is an interesting question about somebody who is a pacifist how they would control the world's most powerful military.

, ifllowed in the interview the u.s. work under stress, he wouldn't -- under threat he wouldn't hesitate to intervene. his doctrine, there is still a lot to be learned about it. he supports nato. he will be asked about that more now that he is the presumptive front-runner because foreign policy is something he can't avoid at this point. he is indeed the front runner after nevada. he is set to sweep through the democratic field. who are his key opponents from here? ros: it is bernie on the progressive wing versus democrats on the more moderate wing. some democratic london's were out saying the democrats on the moderate side have to get together areas some of them have to talk out and pick somebody to carry the torch against sanders.

that person didn't say who it should be to hold the torch, but you have got joe biden who may do better in south carolina. ,ete buttigieg, amy klobuchar michael bloomberg. they are all in the moderate camp. throw supporto behind one candidate, that would be a classic progressive versus moderate matchup. it is interesting to see who will drop out at this point. some big events coming up, another debate, the south carolina vote and then rolling onto super tuesday. we will have a better idea of how the race is shaping up. we watch this space. paul: president trump, on his way to india. are we expecting any policy breakthroughs? beenthe expectations have tamped down. robert lighthizer was going to

take a trip in advance of trump. he canceled that and trump has suggested maybe after the november election, which he expects to win, he could seek a broader trade deal with india. a lot of this is splashy, 24 carat entertainment. trump is going to go to the world's biggest critic that cricket stadium and the taj mahal. there is a lot of things the u.s. would like india to do, open direct investment. it is possible that will be some politically expedient deals announced. i've read that possibly some defense buys we may already know about, packaged and announced. and a possible reduction in tariffs for harley davidson motorbikes, the hogs from wisconsin. we could see, not much chance of a major trade deal or any talk about trade between the two leaders this week.

thank you for joining us. we should mention michael bloomberg is the founder and majority owner of bloomberg lp, which runs this television station. you can watch us live and see our past interviews on our interactive tv function, tv and you can dive into the securities and functions we talk about. you can become part of the conversation as well. this is for bloomberg subscribers only. you can check it out at tv . this is bloomberg. ♪

i am paul allen in sydney. australia's main stock exchange is launching a new tech focused index which begins trading today. jackie edwards joins us with more. the key question is why?

this allx created technology index to increase global awareness of australia's tech industry. they have grown at twice the pace of australia's benchmark over the past three years. they want to create an index that represented a broader range of tech companies in australia. paul: it is brought but not too broad. -- broad but not too broad. >> you have names like wax stocks, after pay, ltm and zero but you also have technology health care shares represented. you have online marketplaces like car sales.com. paul: are there any expectations? >> it is hard to say. we saw a dip in shares in the u.s.. that could carry over to australia's market today. we saw futures tipped to open

lower. we will have to see how the first day of trading will go. paul: thank you joining us. let's get a quick check of the latest business flash headlines. crowne resorts faces the first set of public hearings on monday on whether its casino is fit to run a $1.5 billion gaming development. there were media reports they used agents linked to human traffickers and money laundering to attract wealthy chinese gamblers to its casinos. the billion or an, they are among the witnesses. fear has ceo john ruled himself out -- john pierre . he has decided to stay at an australian -- italian trader.

the financial times reports he hened the chairman to say was no longer interested in the role. j.p. morgan chase is planning to enter the u.k.'s consumer printing market, offering a range of savings and loans. that is according to sky news. stalwart would be jumping into a place with a state of flux. people are looking for alternatives to traditional lenders like hsbc and barclays. that is almost it for the first hour of bloomberg markets: asia. we have trading in new zealand underway. recovering some lows, off .8%. inhad the reset on futures sydney. looking at a lower opening in australia by 1.2%. a couple of minutes away from the open. look out for the all tech index.

first day of trading. watch.pe's steel under down 7% in under $185 million. more coming up. this is bloomberg. ♪

paul: good morning, i am paul allen in sydney. so three opens in one hour, japan is closed. welcome to bloomberg markets: asia. \ our top stories, south president -- schools close as 600 people are confirmed infected by the coronavirus. that is a 20 fold surge in five days. inly shuts down carnival

venice and fashion week in milan. the upper is 130 has europe braces for more cases. g20 finance ministers and central bankers consider the economic fallout in riyadh. got the market open in australia and this is how we are currently looking we have a staggered open in this part of the world. stocks coming online in alphabetical order. right now we have the asx -- just a moment. it is looking -- there it is, off .25%. futures were pointing south by more than 1%. bluescope steel has started trading. i will still -- i will tell you about that. s&p, it is weaker. there is bluescope, 4.2%.

second half, first-half earnings 70%,off, net income down bluescope saying the second half, probably going to look similar to the first on uncertainty around the virus impact. bluescope announcing a $100 million share buyback in the second half. we are going to be speaking to bluescope's ceo at 9:00 hong kong time. if you are watching in sydney. that will be midday here. there are no new country reported virus cases in the last seven days per this comes with a jump in cases outside of china raising the alarm among global health officials. yvonne man is with us in hong kong, let's start with you. south korea among the nations reporting a surge in numbers. what is the story? seems like it is the

cases outside of china starting the worrying trend. south korea is one of the biggest examples where we saw the number of cases rising in 20 fold increase in a matter of five days. the death toll has risen to six. half of the new cases are still tied to the religious group in woo where theay followers affected a hospital after attending a funeral. south korea raised the disease response other to the highest, a red alert. israel,s like the u.k., raising travel warnings to the country. the u.s. doing the same for japan very we mentioned the coronavirus outbreak spreading to europe. italy has been the biggest hit so far, when it comes to the northern part of the country. total amount of cases at least

140 or so. we have 50,000 people that are on lockdown after a second reported death. we are hearing restaurants and businesses are closed through the venice carnival, milan fashion week has been scaled down. soccer matches have been canceled. the e.u. saying these measures we are seeing out of italy and dozens of towns are essential, and should maybe need to be replicated in other communities as well. also new to highlight iran where state police -- media have had the eighth death. it is the biggest number outside of china. tom, we are seeing the government vowing to step up its policy response. president xi jinping had a teleconference with leaders from

provinces and cities and towns as well as military offices as well and generals across the country and spelled out what he said was the severity of the virus and the challenges it opposed to china's system of governance. he said one priority was making sure the infection rates are pushed down through the other authority was ensuring there were not any spikes and infections in the chinese capital. he also said china would step up its policy adjustments to battle the virus but also put a floor under the economy. he said production should be stepped up in an orderly manner and i was should be revived in the low risk provinces where you have smaller numbers of infections. that was the message from xi jinping and on the ground we are seeing local governments easing the criteria for getting businesses back to work. we have seen the massive wholesale market in one province which opened three days earlier than expected. in terms of capacity we have

seen the move up to 50% and 60% between 40%, 50% the week before . power consumption has increased 7%. it is still off pre-lunar new year levels. the challenges we have been talking about for businesses are the logistics they have to work through as well as getting employees back into factories and offices which means a challenge. the central bank -- remain a challenge. the central bank has the tools to ensure the economic punishment china is it will not be that severe. the government -- deputy governor said there is a v-shaped recovery. paul: south korea zika virus threatens to limit korean economic recovery. the finance minister saying negative impact is unavoidable and the country will take steps

in the case of foreign exchange movements. so from the south korea vice finance minister, g20 finance ministers have been spending a lot of weekend discussing the outbreak. what have they been saying? it seems like they have talked about this outbreak but when it came to any global response, there were only a few details. they will continue to monitor the risks, that there is a menu of policy options, but not a ordinary -- coordinated response. they will persist on the economy given uncertainties out there and that supply chains. speaking of that, we heard from samsung shutting down operations at a plant. after an employee had contracted this disease. they said this suspension will last until monday morning but

could impact production of the high-end smartphones, particularly with the foldable galaxy phones. the have shifted half of their operations and production to vietnam. shifted half of their operations and production to vietnam. small andvey of medium-sized enterprises suggest have a of the sme's month of cash reserves to be able to pay salaries and pay their debts. they are facing significant pressure. the reality despite the measures that have been implement it by the central bank is many small companies struggle to get loans and relief from china's big state owned banks. we had an illustration of that. one bank said it had just 5% given to sme's amongst its

clients. in terms of loans issued by the banking sector as a whole, you are looking at 255 billion yuan for the containment efforts. to put that in perspective, china's sme's- everyne trillion yuan quarter. so that is something of a drop in the ocean. it is not a big surprise the lenders are reluctant to issue more loans given the records and defaults. tripleorming loans could to 1.6%. that is the concern for the lenders. it is about the impact. we have seen additional measures over the weekend from the finance ministry to cut the power phase and gas phase are some companies until june which follows reductions or waivers on social security payments until the same timeframe.

those targeted measures continue to be rolled out by the finance ministry, the pboc saying they have more policy tools but clearly the sme's feeling the pressure. paul: thank you for joining us. we are getting more news out of south korea at the moment related to this. south korea will act quickly and firmly if markets and volatility rises at it will announce extraordinary measures for the economy as well. this after earlier saying south korea would take steps in the case of one-sided foreign-exchange movement and device for an is minister saying negative impact from the virus is unavoidable. let's get the first word news. we start with the bank of japan which says it is well prepared to act if it needs to address the coronavirus. the governor haruhiko said he

has -- he is monitoring the impact closely. the yen retreated to a 10 month low against the dollar last week after japan's latest gdp figures showed the greatest contraction since 2014. australia says the economy is booming resilient despite the effects of the coronavirus on china. treasurer josh freudenberg said the impact on the tourism and education sectors would be watched closely. there have been around 100 susan students -- 100,000 students able to begin university classes. on inhave seen an impact terms of international tourists and students. there is some disruption to the international supply chains. a number of chinese factories remain closed.

we will continue to monitor the situation, but we know the australian economy is resilient. su: moving to the political front, hardliners in iran have won a majority in elections. conservatives swept to victory and other -- tehran cities. it seems to be a rejection of the president rouhani's powers. andwill be hardliners conservatives. turnout was 42%. in u.s. politics, bernie sanders has taken the lead to unseat president trump. sanders won the nevada caucus with 46% of the vote. joe biden was a distant second, short of 20%. pete buttigieg was third with 15% with his campaign saying there were errors and inconsistencies.

his campaign said it received 200 reports of discrepancies. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. that our next guest says premium china places on transportation has aggravated the coronavirus outbreak. and we have a look at the economic risks as the coronavirus engine used to spread outside of china. this is bloomberg. ♪

, the virus in this case, we are going to rely on international organizations like the who and how our country is interesting to recovery. the second one is really on the economic side. we still don't know how to contain -- it is a grounding of the movement. affectingfinitely mobility of the people as well as goods and services and that is creating this confidence problem. indonesia,including raw materials imported from china, capital goods, that will affect our ability to produce manufacturing. >> how much of an impact have you seen on imports into china? momentstatistic at the minus 4% and -6%, 4% for input -- export, 6% for the imports. that is going to be, still continue next year. [speaking simultaneously] to4% of negative imports china. >> pressure at this moment. >> you have cut the growth targets for your country.

is that a conservative cut? because we are assuming that china and global growth is going to be corrected downward, then indonesia is going to be to 0.6% with 0.2%, up depending on how the scenario will evolve. >> i have seen a host of research about calamity of growth in china. what is the worst case scenario you have prepared for? largest is the second economy in the world. it is a part of the supply chain. it is tourism and so on. it is affecting the global economy. the worst case is the global economy to be corrected significantly which is meaning they are going below 2% which is i think this is not good because last year, 2019, we are hoping

2020 will be recovery. for indonesia we are going to concentrate on our domestic source of growth. that was the indonesian finance minister speaking to bloomberg at the g20 conference in riyadh area for more on how policymakers are -- in riyadh. for more on how policymakers are dealing with this, we are joined by carlos casanova. he is the head of economic research. we were just hearing from the indonesian finance minister. the bank of indonesia cut. are they going to need to cut again? the good thing for indonesia, like them minister was saying -- the minister was saying was there is plenty of room to cut interest rates. if you look at real rate adjusted, indonesia has a wide

differential. we should be supportive for more measures going forward. we have other economies in the region that have ammunition and everybody is waiting to see what the medium to long-term impact will be in order to adjust more aggressively. malaysia and the philippines, the companies have a little bit of room to fend off the risks from the coronavirus and the slowing china. paul: i want to talk about south korea. perhaps one of the most exposed to all of this, reeling from two trade disputes last year and now the surge in coronavirus cases. we have a second death and this news from south korea, from the finance ministry it will announce extraordinary answers for the economy. what is your interpretation? forecast forsus

bank of korea is to remain on hold. we believe there is room on the real rate differential with the u.s. to do some monetary policy easing so we don't rule out that possibility of a rate cut. a policy rate is lower but the bottom yield offers a better return and inflation is expected to remain subdued. some room for easing. on the fiscal side they have announced a record basket -- record package. they seem to enjoy going down that route but there is only so largehey can do given the base. they are doing a lot of fiscal stimulus to shield the economy from this downside from the trade war. all of those tariffs remain. being a little bit more challenging first of korea in 2020 and potentially more downside pressure to the forecasts are highlighting. how about your

expectations for the korean won? there was a promise that the ministry could defend that. at what point does that he, reality? -- that become a reality? >> we have seen impact. 12%, it iss about the largest country on an upstream exposure to china with the largest portion of intermediate exports to china. there have been supply-chain disruptions. the market reflects that. kospi the won and the reflecting that. we see both of them edging down. i think there is a real need to do something in order to reverse that dynamic and to provide support behind south korean conglomerates that are experiencing downward pressure. hong kong is another

economy suffering from a double whammy. first it was a huge hit to growth from the political turmoil and now the coronavirus as well. is your case for a protracted recession? >> hong kong is going to be hit quite bad. there is a saying in spain, it is raining on wet soil. that is what is happening in hong kong. we see the second consecutive year of that growth. although the pressure is piling up on the retail sector. -- all of the pressure is piling up on the retail sector, hospitality -- they have been struggling. on top of that we have another year of weaker domestic demand. most of the visitor arrivals in hong kong are from mainland china and those have plummeted almost like gone down to zero as a result of the temporary travel put intions that were

place to control the spread of the disease. it will continue weighing on an economy that has been significantly impacted by chinese consumption in the past months. paul: you're seeing recession risks returning in japan. how real are those? >> i think it is going to be difficult for abe to avoid that. japan and singapore were there for economies -- were the economies we highlighted. managed to avoid risk because they announced a significant fiscal stimulus package last year that was equivalent to approximately 2.5% of gdp. had there not been an outbreak there would have been a boost in the japanese economy. domestic consumption

contributing very negatively to gdp that quarter. going forward you have the impact of the coronavirus, japan and korea, two of the countries most impacted outside of china, more than hong kong and singapore. that will put a damper on consumer sentiment. in the medium to long-term if you see a slowdown in the global economy, that will impact japanese consumers and translate into downside pressure. there is a question for the japanese economy which is everyone was expecting this following from the attentive olympics. can they go ahead with that event as planned? -- tokyo paul: that will be closely watched. the head of economic research, thank you joining us. ,ake a look at bluescope shares one of the worst performers on the asx right now. off more than 5% after

announcing a 70% decline in the first half earnings. this is bloomberg. ♪ berg. ♪

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this is bloomberg markets, asia. i am paul allen in sydney. su: going to start in south korea where the president has raised his country's infectious disease alert level to the highest after six people died and 600 people were confirmed to be infected. that is a 20 fold increase over the past five days. schools-in has ordered shut across the country after the holiday break and for the totral bank, which is due hold an emergency meeting today

to consider the economic impact. italy has canceled public events and implemented a travel ban in the north of the country. this after the number of viruses ran to 40. jump in cases was linked to a hospital in lombardi where one man is believed to have affected dozens of patients and staff. the venice carnival and milan fashion week have been canceled. g20 finance chiefs and central bankers say they see the downside risks of global growth persisting amid the coronavirus outbreak. despite spending much of their this,n riyadh discussing their final statement provided few details of a coordinated response other than that they would enhance risk monitoring. china's representatives were absent. china said most coal mines and

refineries have resumed production. they had shut down much of their production to cope with weak demand and lack of workers. any negative impact from the outbreak on china's coal production has been basically erased and the demands for morey return to normal as companies resume operations. in iran hardliners have won a majority in the elections. this according to the news agency. varioustive swept cities in what appears to be a rejection of president rouhani's engagement with outside powers. of 290, 220 will be conservatives and hardliners. turnout was 42%. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan.

this is bloomberg. paul: thank you very much. let's take a look at how things are looking on the first trading day of the new week. in australia the asx is weaker by 1.5%. bluescope steel coming up with a 70% decline in the first-half net income. we will be talking to the ceo in a while. new zealand is weaker by 1%. look at the s&p futures, weaker by 1.1%. let's get more on the markets. investors continuing to trade -- tread cautiously. david ingles joins us now. it is against the backdrop that korea is what we are watching today and for this week. market opens up, given how australia and new zealand and the futures are

trading, i expect to the korean markets to come under pressure, not the least would be samsung. one of their plans -- that alone is enough to put a lot of pressure on the equity markets. the other point i want to make, on the back of the fed expected -- two 25 basis point cuts, the -- the bank of korea has come out with an emergency meeting. sawlast time they met, you two board members dissenting on the ford rate cut. -- four-day cut. it look at the survey, it is split in the middle. slight majority. -- as ofy was taken late last week before the escalation of cases over the

weekend. cap dollar one -- you look at dollar-won, it was at a high. in the bank of korea meets, it will be something worth watching. and the currency. paul: we got to talk about treasury yields, pushing to key levels. the market expects the yields to fall further. there is a great story, great piece running just that. when you look at where the 10 year yield is, you are closer to lowerend -- lowerend. the forecast is for 4.9%. we are below 1.5% now. and the bond market investor, do you drive yields slower, or do you wait this out? citigroup says when you look at expectations for the fed, it was

going to slow down anyway. that will be brought forward so it forecasts 1.5%. watching that 1.3%, the record low for the 10 year. we are at record lows for the 30 year. the spread has not compressed -- that will begin to negative. -- in to negative. margaret -- they are faced with a dilemma. david: it will be hard to map out the current valuations which have gone back following the drop of 12 month lows, it will be hard to map out what the multiples should be on this market. we know it will be a slowdown. it will not come as a surprise.

what will be keeper markets is because you have almost 200 companies in china as of friday have said it will be delaying the results -- said they will be delaying their results. market -- the proper multiple, where it is excited to be with the offset of the pboc, two moving stories. i tracked a number of companies bechina which will likely continuing to tell us they will be doing the report cards. ingles,l right, david thank you for joining us in hong kong. chinese resident xi jinping said over the weekend -- president xi jinping said the coronavirus was at a severe level. he said the virus control remains at a critical stage. let's bring in a research fellow. thank you for joining us. >> thank you for having me. paul: you have written a

scathing critique of how china has handled this crisis. >> i am critical of the way the party state handled the crisis at the outset. i think it is important to note there are not many systems that an outbreakell with of this nature. we see korea and japan have many systems. in china's case, at the beginning in particular, the priority on controlling information, unofficially sanctioned narrative, did prevent many whistleblowers from being able to raise the alarm for weeks if not most a month before we saw national emergency measures put in place. paul: we saw the who praising china and set a new standard for outbreak response. were they misled, or was that a good ascription?

-- description? >> the who wants to be able to preserve their access into china and to send officials in at the same time as being able to be realistic and honest with the rest of the world. china shares information, continue to visit, now starting to change their labor to little bit as the virus has not been contained. paul: a virus of 1.4 billion a population of 1.4 billion people is critical and could have been worse. we only have to look back to recent history with sars. >> i think china's system has learned something from sars. it was more difficult and took longer for the who to visit china during sars. we have seen more transparency if not full transparency in this

case. while we are seeing numbers flatline in china, the rate of the growth of the virus indicates it is too early for us to suggest it has been managed better than sars. paul: i want to get back to the question about the messaging. do you feel that public information has gone into the territory of propaganda? >> absolutely. the message from the top levels of government in china is this is a people's war being led by president xi jinping and heroic medical workers. everybody is a soldier on the front lines and has to work to defend the country. it will be challenging to see how that works at the same time of trying to restart an economy when most people want to stay home or are not able to get back to work. some balancing the from the economic side and continued containment of this serious virus is going to be a challenge. some political

implications for xi jinping. before this happened, we had people questioning the idea he is leader for life. what does he need to do to maintain that power? >> there are not many ways chinese people could challenge the power of xi jinping. 90% could wake up tomorrow think they wanted a different leader but they would be very restrictive -- restricted in their ability to signal to each other, to organize in any way. the party would like people to love them, but they don't need that. power is what is important. i don't see them shaking xi jinping, but i wonder if there is a new generation who in some decades be in positions of power and think reform is necessary. some political evolution with the stars virus -- sars virus and 20's -- in

2003. calling forle are freedom of expression and transparency syrian i think this system has quickly cracked down on those messages. we have seen increasing censorship and the party blame game. they take credit for the victories at the top and blame issues on local officials. local officials have been replaced that haven't performed well. that tactic will continue to play out. paul: all right, thank you so much for joining us. if you want to track the spreads of the coronavirus, you can do so on bloomberg.com and on the terminal. go to map virus go. this is bloomberg. ♪

>> a stress test for china and the world, for supply chains.

hopefully we will come out even stronger with the knowledge we have had to deal with this pandemic and how we think about it economically but it is an unknown unknown at the moment. >> [indiscernible] at thedy looks transportation, tourism. definitely those area is going to be hit very hard. >> there will be an impact on the level of growth in europe and in the rest of the world but now there is clear need for day by day monitoring. >> the alternative scenario is it stays there longer and that it spreads out to other countries, and that it, by creating a slowdown in china, that will have a worldwide impact. but it may also create disruptions in the global value chains. >> they price down.

they look at this as a sharp decline, sharp reshaped recovery and we are done. that is not going to be the case. those are world leaders discussing the impact of the coronavirus on the world economy. this is bloomberg markets: asia. predicting a massive hit to the economy from the outbreak, halfg growth could fall to of 1%. they are underpricing the risk, in and it was from the g20 summit in riyadh. -- in an exclusive interview from the g20 summit in riyadh. >> the world will pass a stress test. it is a temporary one quarter impact on gdp and trade and we will move on and rebound. our projections. >> the g20, the language being

used is about a potential corded to a slowdown in the world as connected to this new black swan. what is a coordinated stance? 2019 was rates. what is 2020? >> in our estimates this is going to bring global growth from 3.5% to have a percent which is a massive drop -- half a percent which is a massive drop. the first time in post war history china will post a negative number for the -- that requires a response. the global number basically tells it is not just china. it is affecting hong kong, singapore, and we have seen policy losing debt. the support the rest of the world can give the is fiscal policy is to keep the world --

the door open for trade weather than shutting it -- rather than shutting it down. markets, look at equity markets are only slightly shaky. are equity markets underpricing those? >> they definitely do. they look at this as a tense jury, sharp decline, sharp v-shaped recovery and we are done. that is not going to be the case. paul: the ubs german. south korean officials say they are ready to take extraordinary measures as the number of coronavirus infections surge. this is bloomberg. ♪

♪ markets.s is bloomberg

let's get a check on the business flash headlines. crown resorts faces the first set of public hearings whether its casino is fit to run. there will be media reports they used drug gangs and money laundering to attract wealthy tourists to its consumer -- its casino. the unicredit ceo has ruled himself out of the running for the hsbc top job. he has decided to stay at the italian lender who shares have tumbled since bloomberg reported he was the top outside contender to become hsbc chief executive. he phoned the hsbc chairman sunday to say he was no longer interested in the role. j.p. morgan chase's plan to enter the u.k.'s consumer banking market, offering a range of savings and loan products

under its chase brand. the wall street stalwart would be jumping into the consumer banking market business in a state of flux with many people joining new fintech players as they look for new lenders instead of traditional. seeing some weakness here in australia, currently off more than 1%. u.s. futures notably lower as well. s&p futures off 1.2%, new zealand off 1% and korean futures off by two thirds of 1% pay we heard from korea's finance ministry today saying a hit from the coronavirus is unavoidable and the extraordinary measures were to be taken. let's stay in south korea. the china's minister saying the virus is threatening the nation's economic recovery. for more on that we are joined

by our breaking news reporter. what was the turning point for the virus spread? >> it was when the 31st patient in south korea was found to have map connected with a large of religious organization in a city which is quite far off from seoul, the capital. she attended this mess service and is a part of this religious organization. surge in theto a epidemic. it was a count of 30 something cases on tuesday. now we are looking at a figure of over 600 and most of this has to do with the very religious sect this patient is involved with. paul: we have had south korea's government raising its alert to the highest level. tell us what that means. >> the last time the government

raised this was during the h1n1 flu crisis. it has not done so since then. this time, it is the second time ever the south korean government is raising it to the highest level. the government has total control over whether or not military personnel can go on vacation and aso a say on air control well as pushing back public-school resumption. basic public affairs and public events, the government has a right to concentrate its support and its personnel on fighting this epidemic as a priority over anything else. paul: how about specific guidelines the government has been giving to its citizens? >> back to the first patient, because such mass religious events have led to a surge in

the epidemic cases, a lot of government officials have been constantly urging people from taking part in mass assemblies. this includes religious activities and protests that are in secluded areas with vastly populated full young. the government is urging people to stay away -- populated. they are emphasizing they are not hindering on the freedom of religion but prioritizing stopping the outbreak of the epidemic. reporter breaking news , thank you for joining us. g20 finance officials in riyadh have been discussing the impact of the coronavirus outbreak. >> the asian central banks are out there. we already saw interest rates being cut and there are further

announcements and expectations of further interest rate cuts. people need to be out fast. >> have already done their part, reducing interest rates, relaxation, reserve requirement. [indiscernible] still 57% of our gdp. >> we have tools to support for sure. either we use our tools that we used in the past, placement of deposits or changing the interest rate, but any intervention that might help the economy in this case is usually, should come from the fiscal side. >> the countries that have the capacity to spend more, the countries that are saving money because they are paying less interest on their debt because interests are historically low use that capacity.

>> we will continue to monitor the situation but we know the australian economy is remarkably resilient. paul: let's have a quick check of how south korean markets are tracking right now. we have those statements from the finance ministry about the potential damage the coronavirus could do to the country. korea futures are weaker by about .6%. the finance ministry also pledging action should be required to prop up fx markets if there are outsized moves against the won. an impact from the coronavirus, pretty much unavoidable. areets elsewhere as well trading lower. we have got s&p futures are weaker 1.5%. in australia we are weaker by a similar amount. the outlook for deals in china and hong kong as the global coronavirus outbreak continues. david brown joins us.

the market open in korea is next. this is bloomberg. ♪

haidi: good morning. i'm haidi stroud-watts in sydney. welcome to "bloomberg markets: asia." just opened for trading. our top stories this hour. south korean president raising the infectious disease alert level to the highest level as more than 600 people were confirmed infected by the coronavirus. the bank of korea prepares for an emergency meeting. u.s. futures are sliding while gold rockets.

italy shuts down carnival in vece and limits fashion week in milan. the outbreak rises to at least 140 confirmed cases. coronavirus caution gripping global markets. let's get a look at the market action. reporter: south korean markets just opening and no surprise, under pressure with the move following two weeks of gains as south korea becomes the focal point for the coronavirus. on theean won weaker day, bringing into focus with the bank can do in terms of easing following the g20 meeting where the world leaders said they would do anything they possibly can fiscally and monetarily to make sure this coronavirus does not have a broader economic impact. a quick note. japanese markets are closed but the currency markets are not. you can see the yen slightly higher on the day. not a massive move. the real action seems to be in

the australian and new zealand markets. theralian markets down by most in three weeks. that is crucial. this is coming is a big, big risk indicator. the aussie dollar down, hitting -- testing at the 11 year low. the new zealand dollar -- excuse me, stock following the new zealand dollar under pressure today. the australian stocks. also havingurrency the largest short positions on record. we will have to see if risk off is the name of the day. haidi: thank you. we will check back in shortly. for thetill waiting daily coronavirus figures out of china as the economic fallout continues to widen. andal health officials finance chiefs are sounding the

alarm amid a surge outside of china. let's go to our correspondent tom mackenzie. bloomberg anchor yvonne man joins us in hong kong. i will start with you, tom. beijing pledging to step up more policy response. we are waiting for the daily numbers to see if a picture of stabilization is painted. yes.ter: it looks like the numbers have been delayed at least by about one hour. we had expected those out of the epicenter of hubei province toward the end of the sixth hour in beijing. we have yet to say those have been the national numbers. we are waiting for those as well. in total numbers, we do know so far, 77,000 infections now in china. out of hubei province yesterday, we got an additional 630 cases and additional 96 deaths.

i should note about 1700 people were discharged. the total number of infections continues to rise here in china even as the inspection rate itself seems to be moderating -- infection rate itself seems to be moderating. in terms of the policy response, president xi jinping held a teleconference with a number of officials where he stressed the need to step up policy adjustment to meet those economic and social targets. wellso said production as should be increased and a reasonable manner and that output should be stepped up, particularly in the provinces where you don't have a significant number of infections. it should be noted that there 18e an initial -- additional cases beyond hubei province. 21 provinces did not report any additional cases of infection. leasts not seem like, at

the moment, there is a danger of a major spike. in terms of what's happening on the ground, we are seeing local governments remove tough criteria for businesses to restart. back to overall is between 50% and 60%. still a long ways off before being full capacity but it has picked up. in terms of concrete examples, you have this massive wholesale market that sells electronics and retail goods and clothing. that has reopened earlier than expected. there is a push to get this back, but of course, getting employees into factories and offices will be discussed and the supply chains remain muddled as well. they need to unclog that is what the pboc has come out to say that they think they will be a v-shaped recovery and china and they do have policy tools at their discovery -- disposal.

meantime, the shift in focus and the widening of the spread has moved somewhat to outside of china's borders. south korea among them. we are just getting that market reaction after the infectious diseases level was raised at a high. following 2.3% and reaction in the korean won, plunging to the low -- 7/10 since august. muddled at best supply chain situation. level toof the raising the highest for south korea, there's a feeling that when it comes to the infections we are seeing, the amount has faltered. yvonne: it seems like the focus is trying to avoid a global pandemic outside of china. you're seeing the most alarming

spike in south korea. the number of confirmed cases topping 600. that's a 20 fold increase in a matter of five days of the death toll has risen to six. what we have learned so far, the latest batch of cases, it is still tied to that religious group in day will where we are learning that followers may have infected a psychiatric ward in a hospital after these members attended a funeral at the same complex. that's perhaps why we are seeing the government raising the threat level to the highest, red alert. we heard from the finance ministry saying they will announce extraordinary measures and they will act quickly and firming -- firmly if market volatility arises. urging ruling party is for an $8 billion extra budget to fight this virus. this is for the countries like the u.s., israel, and the u.k. have raised trouble warnings to south korea.

coronavirus concerns also spreading to europe with italy, particularly in the north, which has been hit. more than one hundred 40 cases in the country at two reported deaths. now we have essentially 50,000 people southwest of milan on lockdown. businesses, schools are closed. soccer matches as well have been canceled. carnavale and milan fashion week have been shut down. they may need to replicate measures in other communities. man in hong kong and tom mackenzie in beijing. we will be with you throughout the day with more updates. let's get first word news with su keenan. reporter: thank you. we start with the bank of japan that says it is well prepared to act if need be to address the

impact of the coronavirus. speaking at the g20 meeting in riyadh, governor kuroda said he's monitoring the outbreak on inflation and financial markets closely. the yen retreated to a 10 month low against the dollar last week figurespan's latest gdp showed the greatest contraction in 2014. australian meanwhile says the economy is proving resilient despite the effects of the coronavirus as the impact it's having on the biggest trading partner in china. speaking to bloomberg at the g20 sunday, the treasurer said the impact on the tourism and watch.on sectors will be a ban on people entering australia from mainland china has meant a big impact on education, around 100,000 students have been unable to begin university classes. >> we are really having an impact on the australian economy in terms of international

tourists and students. there's also disruption to the international supply chains with a number of chinese factories remaining closed. we will continue to monitor the situation, but we do know the australian economy is resilient. reporter: to the latest on the political front in iran. hardliners won a majority in parliamentary elections. inservatives swept a victory major cities in what appears to be a rejection of president rouhani's engagement with powers. out of the 290 sitting members of the parliament, 220 will be hardliners and conservatives. turn out was just over 42%. finally, in the u.s., politics. bernie sanders has taken the lead in the democratically to unseat president trump. sanders won the nevada caucus over the weekend with 46% of the vote. joe biden was a distant second,

just short of 20%. pete buttigieg was just third with just over 15%, although his campaign has been saying the results showed errors and inconsistency. specifically, his campaign said it received more than 200 reports of discrepancies. 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. i'm su keenan. this is bloomberg. you.: thank still ahead, south korea raises the infectious disease alert to the highest level. we will get a live report from soul later. -- seoul. up next, the impact on the global economy. this is bloomberg. ♪

>> patient central banks are out there. we already saw interest rates

being cut and there are firm -- further announcements. usually central banks are the speedboats if you want to find such a thing and they need to be out fast. >> monetary policy has already done their part in terms of reducing interest rates, relaxation on the requirement. on the fiscal side, we are not preparing for a package in indonesia. gdp.mption is still 57% of >> we have support for sure. either we use tools we used in the past or changing the interest rate. economy,vention on the in this case, it should usually come from the fiscal side. >> the countries that have the capacity, the fiscal capacity to spend more, the countries that are saving money because they are paying less interest on their debt because the interests are historically low, use that

to pass it. >> we will continue to monitor the situation but we do know that the australian economy is remarkably resilient. haidi: there you have it. g20 finance officials and central bankers meeting in riyadh to discuss the impact of the coronavirus impact on global economics. let's discuss more with jingyi pan. great to have you with us. how does one go about assessing the potential global impacts of this virus given that there is no end in sight? there's no comparison, it seems the best we have is sars and that was 17 years ago. >> thank you for having me. bit of thet is a million-dollar question with regards to what exactly is going to be the case of the coronavirus. it is a bit of a nonlinear trajectory in terms of how things have been.

i think it is a bit of a wait and see route. very importantly, i think the economic indicators we have to be looking at r the trend. at this point i would say we have not received so much of these numbers just yet. haidi: in the meantime, you'd to see classics performing well. the longer end of u.s. treasuries for example. with this chart. you say you will be looking at shelter by buying gold and u.s. dollar. investors apparently want both. we are seeing the negative correlations between gold and the greenback at an eight year low. how do you play this and how does this tug-of-war between these haven assets end? at this pair.look

i think there are substitutions. but i think it's also a special time where you look across the region, the likes of asia and europe, you expect a lot worse and the episode of the coronavirus. i think the investor safety, i -- we have a lot of flows into the u.s. and expectations that will hold a lot better and certainly someone has seen the market shot for a bit of a correction. over and above this, i think the fact that the goal itself has surged -- gold itself has surged. i think with the uncertainty we have on hand, this kind of trend might continue. i'm just going to be a little

cautious in rebalancing and also the fact that how much containment insulation remains as well in regards to the likes of gold. of currencies, are you seeing the move to the early monday morning session, the bots lowest, the korean won at the lowest since august, and the ringgit also to the highest since last september. say you say you actually asian currencies at this point, what do you like and why? >> i should say actually it's a little more dollar asia. holdingless, not really up so much the asian currencies at this point in time. the coronavirus

is holding up the u.s. dollar pair that's what i'm looking out at this point in time. with regard to the asia economy, there's a little bit of this --cern into how the durham demand situation will be particularly given the economies such as singapore and south korea. i don't think so much asian currencies will in the near term be favored as much. how much exposure do you see for u.s. stocks? there seems to be a perception that is a spot of safety in the realm of equities. say with regards to the u.s. market, there's a bit of a contention as to how the data itself will be and over the course of last week. guidances along

the weaker end. i don't think it will be a surprise that we see this happening. , thelly, the u.s. economy domestic focus will be a lot more favored. that kind of trend will likely continue in my opinion. haidi: as we look toward the peak of the coronavirus cases in china, is there a sense that the worst is almost over and we may see a recovery in chinese assets? >> i would say that the is a bit in my opinion

of a limbo at this point in time. as we do see that the situation gets a little better in terms of the health risk and the market is contemplating, the other half is the economic impact. with regard to that, i think we are not getting so much of a thise until the end of week. those will be washed much more closely as to what. that will mean for the chinese economy, there is the lunar new year impact that will reach the markets. i think the numbers will perhaps give us a little more direction as to have -- where things are going. there is also the fact that some high-frequency indicators saying that china economic activity has not resumed yet, so these are the things we have to see coming back online before the market puts back more confidence. one last point is the fact that and theel bands -- bans

,ontainment is still in place so we have to see if that will help the situation and if things will return to normal, those are the questions hanging on our heads right now. us outjingyi pan joining of singapore, ig singapore market strategist. thank you. coming up next, president trump's india visit seems to be linked with show events. will they be able toresolve simmering trade tensions ? that's the question. we will take a look next. this is bloomberg. ♪ this is bloomberg. ♪

haidi: this is "bloomberg markets: asia." president trump is hoping for a hero's welcome in india when he arrives on monday, but any lit see events in his state visit will paper over a growing trade

friction between the nations. asia government managing editor joins us from hong kong now. thanare we expecting other a lot of pomp and ceremony? reporter: pomp and ceremony seems to be one of the major points for trump to go to india. he expects millions will line the streets. these big experts are what trump apart from that, we are not expecting too much on trade. there was a canceled trip a few weeks ago. defense see some minor talks, but not much else. haidi: other than the hero's welcome, what else does trump actually want to get out of the

visit? bigrter: trump likes these spectacles. it is election season. he wants to convince voters he is well loved overseas so he can use it at campaign rallies. it might help with the american vote. broadly, the u.s. is looking to use india strategically with china. they have started referring to the region as indo pacific. they want to strengthen those bonds and get india more involved in that region. haidi: how much is this visit going to help? toughas obviously had a time with the controversial citizenship will and the protests we have seen as a part of that. reporter: the visit probably helps modi politically more than anything.

basically a lot of people say he is increment -- discriminating against muslims. he's got cashmere and locked down -- the kashmir region in the lockdown at the moment. for modi, this is big. that he is respected internationally. he's avoided some of the criticism in the past you would expect from an american leader. haidi: we will expect to see the glitz and the show. our managing editor for asia, daniel kate in hong kong. willd trump says millions turn up to welcome him and make his own domestic rallies look like peanuts. coming up next, south korea taking the unprecedented move to contain the coronavirus. more details ahead including what the bank of korea's

emergency meeting might yield. aspectseeing korean seeing the pressure in the early part of the monday morning session. this is bloomberg. ♪ hi! we're glad you came in, what's on your mind?

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su: this is bloomberg markets, asia. we start with the latest in south korea. the president there has raised his country's infectious disease alert level to its highest level , after six people died and 600 were confirmed to be infected. that is a 20 fold increase over the last five days. moon jae-in has ordered schools shot across the country after the break, and the bank will hold a meeting monday to consider the economic impact. italy has canceled public events and implement it in travel ban -- implemented a travel ban in

the north of the country after infections rose to 140. it started from a hospital in a town in lombardi or a man is believed to have infected -- a mana man is infected -- is believed to have infected dozens. andvenice carnival milan fashion week were canceled. risks for global growth persisting. despite spending much of their time in riyadh discussing this, the group's final statement, providing few details, except to say they would enhance risk monitoring. china's representatives were absent and they focused on countering the follow at home. call mind and refineries have resumed production area they have shut down much of the production to cope with weaker inand and a lack of workers

the early stages of the coronavirus outbreak. china'stive impact on coal production has been erased and demand for coal, power, oil and gas returns to normal as more companies resume operations. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. haidi: let's look at how markets are tracking. taking a look at the fallout across asian fx. >> we will get to that in a second. we will start off with the major markets. the korean market stock exchange down 2%, raising 2020 gains are you australia and new zealand indices falling. the kospi index -- the real action is in the currency market. , under pressure.

is taking the cake, at its lowest level since may 2019. you can see that across asian currencies, trading lower on the day with the exception being the japanese yen. the aussie dollar testing and 11 year low. 11 year low. this is a currency to watch to see if it can make a rebound. look at the haven bid because risk off seems to be the name of the game. the japanese yen flat on the day. trading higher a little bit as ,nvestors are weighing this with japan posting the largest contraction in the economy since 2014. still back and forth, the japanese yen flat on the day. the gold and dollar, you can see the haven bid traditionally

correlated when you see that that's moving up in tandem, tells you market is in stress. let's start with the market, investors with a sense of caution. slowly being price back in. david ingles joins us. treasury pushing to key levels particularly the long end of the market. the we expect them to fall further? -- do we expect them to fall further? david: it is what a lot of people are grappling with. you don't get trading in treasuries today. in the cash market -- my point aside, the 10 year is already near the lower end targets. it is a moving target. a lot of those forecasts haven't yet based in the impacts from

this virus of course. 30 year treasury is at a record low. the 10 year is below 1.5%. the record on the 10 year is 1.3% and change. what i want to note, when you china'stwo things, yield curve has been steepening. my opinion is it shows you the market trusts china has the ability, decision-making structure to be able to back up its economy while the jury is still out on what the fed can do. we talk about fiscal stimulus. i quite -- it was a great question, is fiscal stimulus enough? the markets looking outside of china, where you have new curbs flattening as well. -- curves flattening as well.

with: a lot more worrisome the korean backdrop. we are hearing from wuhan news south korea will be considering possible options including the drafting of an extra budget which the ruling party has asked the government to do. david: the currency is under pressure. korea,n em story, because of what has happened. there is a rate decision this week in south korea. quite literally i was looking at the rate expectations which were changing before my eyes. the survey, if you looked at that survey early this morning which reflects the response friday is you have the economists or the number who are expecting a hold, slightly above they expecting a cut --

were expecting a rate cut this week, and you look at where the currency is. it has been moving up. korea is one market to watch. haidi: thank you. david ingles in hong kong. staying with south korea, the finance ministry said the virus is threatening the nation's economic and covering -- economic recovery. what was the turning point for the virus spread to south korea? there has been criticism some of these measures could have been taken earlier. >> the biggest turning point in south korea, we searched in the number of cases, had actually been one particular patient that is connected to a religious sect. they are a church of jesus and the church is located quite far off from full city.

-- seoul city. there were numbers that were skyrocketing. it was just 30 last tuesday. now what we see is a little over 600 and a majority of this has to do with the religious sect. haidi: given we are talking about a supplementary on djitte, increasing domestic pressure, the bank of korea, what kind of economic impact are we talking about? >> the finance ministry has stated this epidemic is threatening to limit the recovery of south korea's economy. and south korea did see a sluggish economy. president moon jae-in, top of the agenda ahead of the april election, has been policy surrounding economy as well as the ruling party pushing for an .xtra budget of 10 trillion won

after the hitch from the trade epidemic,g with the many are urging the south korean government to take a stronger action and firm action in terms of bringing the economy back. we have midterms coming up. what is the political aspect that is at stake? >> it is that whether or not this epidemic, how he deals with these epidemics. you see the history of south korea presidents, we have never escape anyo really of these epidemics. it really matters on how the president deals with such a national disaster. moon having called the alert to the highest may -- many are

speculating moon, with the highest record of support so far, with, amongst supporters, not likely to be that he will be facing a toll from this epidemic. haidi: we will have more from the fallout coming up. we will be speaking to david brown. and looking at m&a deals in china, we are seeing a drying up of activity in that market. this is bloomberg. ♪ this is bloomberg. ♪

this is bloomberg markets: asia. i am haidi stroud-watts. our next guest so the impact of the coronavirus create significant short-term uncertainty around m&a.

it is difficult to predict a strong rebound in 2020. and ig us is david brown, suppose most others, you have been getting a good idea how sentiment will be affected beyond the end of this virus. i am actually optimistic. we see what is happening in the pipeline. the virus has, as you would expect, a significant impact on the negative activity, in mainland china over the two months of this year. but there are processes continuing and people can look beyond the virus. we hope things will improve. we expect to see a bounce at the back end of that.

overall i am optimistic as you can be in the circumstances. haidi: which areas would you isolate as being vulnerable and where would you see resilience? whole scene in china has gone through a tough time. we just surveyed the m&a , and we saw a2019 significant decline in china m&a , down 15%. that was the lowest in five years, the lowest levels since 2014. if you look within, the categories within m&a in china, the significant decline in domestic m&a, china companies within the country, that was up 15% and that is the biggest category. outbound m&a down 40% off

already low totals. thathen there were sectors held up. private equity held up. away.not so far and inbound investment coming in to china was higher than it had been. that is a smaller category. the picture was mixed. you have a lot of uncertainty through the 2019 -- you have financing difficulties with china's leveraging process. and that also it has sort of -- processes,ped those and then we kind of came in to the coronavirus which is more things being pushed and it really is bold.

it is across all of the industry sectors. with some exceptions, medical quite aline shopping, broad impact. -- is like people press the pause button. in terms of liquidity given, whatever it takes from , socialargets to be hit targets to be reached this year, beyond the coronavirus, would you expect deleveraging takes a backseat, the lack of financing starts with dealmaking during the previous, is there likely to be a strong rebound because of easier, more plentiful access to financing? >> the big concern in 2019 was

the true relationship with the u.s. the phase one deal is positive, but it has a result that. the people are becoming reconciled to almost the new normal in terms of how that russian ship will work and they are not expecting to see big changes. the uncertainty has been removed and you have got stimulus measures, as you have described. that is a positive. you have a private equity industry that is capitalized and is under pressure to deploy money. it is highly invested and there is pressure to sell assets which drives m&a activity. i think we will see activity around the stress and restructuring. i think that would be less than many people imagined to be the case. and then there is the battle affect because we have had all of 2019 with trade

uncertainties. now we have the coronavirus. these pause buttons, being released at the same time. i think we will see quite a strong surge in m&a activity has things clear around the coronavirus. a slow start to the year, but i think a very strong rebound. haidi: are we likely to see consolidation among certain industries as a result of doing business? -- athink that is a did general thing in china. the chinese industry is fragmented. there is a lot of space ready for consolidation to happen, m&a to happen. there are normal reasons for there to be a high level of activity in the chinese economy domestically and -- there is fundamental drivers of m&a,

which continue to be there. byy have been disrupted these significant uncertainties in the market. and thosevirus, things are starting to clear, what people are coming to terms with a new normal. those fundamental drivers -- despite what we are feeling at the moment, i feel optimistic about the future. haidi: the tech sector, which in some ways has been sheltered with the coronavirus concerns, in the markets but the prospects improved materially now that the phase one trade deal is out of the way, there is goodwill, or does it take issue the concert -- security issue remain thorny? >> i think it does. i have been --

the thing about cross-border m&a inoss-border industries that are regarded as strategic, the tech sectors is one of those which will face difficulties for the for seeable future. that is not just china investing . i think it is a cross-border thing. so that is something i think, if you look in 2019, and this is not just china, you look at the big deal that happened that year globally, they tended to be domestic. in a single country. we are not -- what we saw in china last year. they are really bouncing around at a low level, small number of deals over $1 billion. haidi: thank you so much for

joining us. the leader for asia-pacific in hong kong. jean-pierre put himself out of a candidate for hsbc. this is bloomberg. ♪ ♪

haidi: this is bloomberg markets: asia.

credit -- unicredit ceo brought himself out of the top running for the hsbc position. bring in david, the asia finance editor in singapore. what do we know? >> as he reported, it looked like he is not interested in the job and he informed the board sunday thanks that no thanks. so it adds to the uncertainty around hsbc and prolongs the search. in many ways, he seemed like an ideal candidate for hsbc. he had turned things around and cut a lot of jobs and cleaned up the balance sheet and was rewarded with some of the best returns in europe among other banks. he had a lot of asian experience and we know they want to give it even more. he spent a lot of time at

societe generale in tokyo and hong kong. in many ways he picked a look -- he ticked a lot of boxes but wasn't interested so the search continues. stay byoes he kind of default on the internal candidate? is it really a strong argument they should be getting an outsider? >> it really is a strange situation. quinn whoave no will has been wearing the interim level -- label for a long time. he said i am no caretaker. i want the job. i can do it and announced a very ambitious overhaul plan last week, cut a lot of jobs, scaled-back in europe and the united states. ambitious long-term strategic plan and it is not clear he will be around to execute it. he is in the running.

at the same time the board will keep looking and stick to their original timeframe which was six to 12 months to find a ceo and that was back in august. we could be talking about this for another several months into june and july which adds to the uncertainty. haidi: we are certain will be speaking to you then. david scanlan with the continuing uncertainty for hsbc's top brass. crowne resorts faces the first set of public hearings monday whether the casino is fit to run a $1.5 billion sydney gaming development or the hearings will continue to consider media reports they linked human --ffickers to drug gains and to attract wealthy chinese gamblers to its casino. j.p. morgan chase is planning to enter the uk's consumer banking

market in the next few months, offering a range of savings. the wall street stalwart will be jumping into a place in a state of flux with millions joining new fintech players with a look for alternatives to traditional lenders. a growing number of chinese companies are postponing earnings announcement amidst the virus outbreak. at least 190 are releasing numbers including companies in hong kong and the u.s. travel restrictions and work from home arrangements have made it difficult to contemplate and there are -- when it comes to guidance for the current virus timeframe. as the countdown to the open up markets in mainland china and hong kong, let's look at how others are trading at the moment. the kospi seeing serious downside pressure, down 1.3% as

south korea is moving its infectious diseases emergency alert level to the highest level over 600 cases -- highest level. over 600 cases confirmed. budgetlity of an extra being compiled and downside for aussie stocks. we had been trading at record highs. downside continues with demand for the aussie dollar, the risk currency as well. u.s. futures also trading to the downside. we had business activity reports, not quite as bullish as expected. the ftse a 50, looking like we could maintain some positivity as we go into the china open. this is bloomberg. ♪ is bloomberg. ♪

>> it is not :00 a.m. in beijing, 12:00 p.m. in sydney. welcome to "bloomberg daybreak: -- "bloomberg markets: china open" we are counting down to trading in the mainland and hong kong. markets as the coronavirus on the threshold becoming a pandemic. cases jumping in south korea and italy. the outbreak dominated g20 toxin riyadh saudi arabia. -- on the global economic outlook. setback for hsbc for a new ceo. once dez he is staying put in his current