haidi: a very good morning. i am haidi stroud-watts in sydney were markets have just come online. taylor: i am taylor riggs in new york and welcome to daybreak asia. here are the top stories we are following this hour. asian markets enter a new quarter after one that equity bulls would prefer to get --to forget. the coronavirus threatens widespread recession.

warns america to prepare for a painful time as new york surpasses china's hubei province in reported cases, the deadliest day so far. japan proposes its biggest ever stimulus package as the virus threatens a deep recession. the business survey this hour will gauge some of the damage. haiti. haidi: -- haidi. haidi: let's take a look at how we are setting up in australia. trickling online in the staggered open, seeing early signs of positivity when it comes to this market after ending the session lower yesterday. we are seeing upside of about .7% at the moment as we are awaiting the rba march 18 meeting minutes later today. we are trying to get past the worst quarter ever, so downside of 25% for australian stocks over the last three months today

is a new day and new zealand, we are seeing gains for a third straight session as the rbnz is doubling down in the bond purchase program. japanese shares looking a little bit lower. they had the worst quarter since 2008 and the kospi also trending lower as well. this is what we are looking at when it comes to u.s. futures after eight horrid quarter it has been for the u.s. and it ended on that self note as well as all major indices closed in negative territory. as the virus outbreak reaches across the united states, president trump says the u.s. will now be going through a very tough two weeks. more than 160,000 people in the u.s. have been infected so far. let's bring in shery ahn on the line with the latest. we heard of course from that daily briefing from the coronavirus task force at the white house. what did we learn about the

modeling and what can we expect? saying theident is vice projections are sobering. it is a u-turn from where he was a few weeks ago when he said that this was nothing more than the flu. i am not sure if you guys can hear the cheering going on right now in new york in the background over the line. evening7:00 p.m., every in new york city, there is a time when the shift changes for inical workers and everybody the apartments in manhattan are cheering, nodding, and thinking these health care workers for being on the frontlines of this war. we know the u.s. has more than 100 60,000, 700 cases, more than 3000 deaths. in new york, cases have surpassed that of hubei province, the epicenter of this disease. new york now having more cases

than 76,000. taylor: i want to talk about that. we have reporting that new york cases surged by more than 9000, more than 300 new deaths, so the state's infections are exceeding those recorded in hubei province. what does that tell you about how much further we have to go? this is a very grim outlook for new york. an expert at from the task force, dr. fauci, saying that the next cases will go up but not to get discouraged because we are going to get the hotspots to get to the curb. convinced the mitigation is doing the trick for the united states. cases jumping over 76,000 at the moment with already this morning seeing the first covid deaths of

a person under 18 years old. what about the latest efforts to mitigate the economic fallout? we had a question when it comes to the deferral of tariffs. do we know anymore? shery: we heard from sources telling bloomberg that president trump has approved a push by some businesses to delay payments of certain tariffs by three months. the order does not necessarily apply to chinese goods or duties on metals. president trump has not done anything on these deferrals. now, we have already seen more to mitigateorts, the economic impact here in the united states. president trump this morning calling on congress to provide $2 trillion for u.s. infrastructure. this is what he tweeted this

morning. with interest rates for the united states being at zero, this is a time to do the long-awaited infrastructure. it should be very big and bold. $2 trillion, and be focused on jobs and rebuilding the once great infrastructure of our country. a much-needed push. ,he world economic forum matters of infrastructure. taylor: huge given we talk about infrastructure. thank you to shery ahn. the university professor and former bank of japan board member joins us to break down the latest business survey. next, katrina dudley with opportunity in market dislocation. this is bloomberg. ♪

haidi: you're watching "daybreak asia." tomany is being warned expect more damage from the coronavirus pandemic then it saw after the global financial crisis. an economy minister says declining gdp growth is likely to be worse with the government pouring more money into the economy than 11 years ago. the upheaval triggered by the coronavirus has led to the worst orderly loss on the dow jones since 1987. the index tumbled from march, closing within the tree percent fall with all but one of the 30 members ending lower for the year so far. the s&p 500 fared a little

better while the nasdaq fell the least among the major indexes. the worst hit is the russell 2000 which plunged most since 1979. parametersidened the of people it has for the coronavirus, including those who show no symptoms but are infected. wereone extra cases reported on tuesday although it is not clear if that means people are asymptomatic or have since recovered. from atlows criticism home and abroad that it has been underplaying the basis. group of 20ys a nations should take the lead in the global recovery from the coronavirus. canberra is calling for coordination in the listing of travel restrictions and the commitment to fiscal action to stimulate the economy when the danger receipts. the australian treasurer said the g20 should put the global economy into controlled

hibernation. -- despite pressure from washington and the worst quarter on record for crude. a wave of crude is headed to europe and the u.s. in a sign that the kingdom is in no mood to use the price war with russia. several data suggests tankers have been loaded and extra supplies are in storage in egypt. --adh intends to wrap up ramp up production to defend their market share. the internet in the u.s. is straining under a surge in traffic as americans telework through the coronavirus outbreak. at&t says wireless voice is up 39 percent and internet traffic up 27%. verizon reported twice the number of calls on a normal day than on mother's day. president trump and his closest advisors hold a call with the telecoms sector on tuesday to discuss capacity going forward. look settocks in asia

to kick off the quarter with data mixed. tentative signs of a recovery after a wild quarter for the market. , european now equities, katrina dudley. great to have you. what i loved about reading through your notes is that this will open up a lot of opportunities within the credit markets. before we get there, i have to ask if you have started to be a bottoming out in some of these credit markets or do you expect a new wave of companies to be filing for bankruptcy? thank you very much for having me. i think it is great you guys are able to accommodate so many people like myself working from home. look, i said we think this is going to open up opportunities in credit markets. we are often able to participate in credit markets before companies declare bankruptcy

becomes the bonds will actually price in the risk of bankruptcy before a company files. seeing so many dislocations in the u.s. debt market. we have that flexibility not only to invest in equities but to be able to invest in these distressed debt issuances and it is a great way for us as an active manager to be able to combine our equity analyst knowledge of underlying businesses with that distressed knowledge of how those chapter 11 and bankruptcy proceedings go along. able to acquire some good businesses that keep valuations, but how are you able to value these markets given there is a lot of uncertainty even here now about 2020 guidance? how do you even begin to apply some of these traditional fundamental analyses at a time like this? katrina: i think that as

is ourntal analysts, it job to act in times of uncertainty. many companies are withdrawing guidance and we are seeing that and what we are doing is dusting off our downside valuation analysis, looking at how much do we think they are going to go down? insert markets, it is a very good benchmark for how those revenues will be in a business, but there are also other areas of businesses where we need to take a much more bearish view. aviation is one example of that we a lot of aviation pliers and companies supplying into that business held out because of backlog. also with a number of these airlines not flying at all. we are taking a slightly more bearish outlook on those aspects of some of that companies

businesses and then we look at the downside earnings numbers for these companies and we see what the market is currently pricing in. was going to get your thoughts on energy because obviously, other than aviation, energy is the other sector we would be watching in the pressure at its base. yes.na: our expectation regarding energy is that it will probably get a little worse in the oil markets before it gets better. you have had a level of demand that is very rapid and the supply response is just not going to be as quick as that demand. you have layering, the saudi -russian issue. we think it will come to a resolution, so from a short-term impact, we think the companies are well-funded. we actually see a longer-term brent number of 50 to 70 based on the cost of replacement so we are actually positive on some of

these oil names but we do that there could be worse news that is going to come in the near term. in australia, we have seen this idea of a controlled hibernation where businesses are an extendednths or period where they continue incurring debts without being threatened or at risk for insolvency trading. does that mean that at the end of this period when the economy grace periodse expire, that there will still be a pretty high level of distressed businesses? katrina: i think what you want to do is understand what is causing the distress in these businesses and whether or not it is a short-term demand that will v-shaped back or whether it is a long-term impairment. i think of my drycleaner. very easy example, but no one is wearing business shirts. we all are sitting in our pajamas.

once we have to start going back , business is going to bounce back so giving them a deferral of liability will keep that business in business and as we come out the back end, it will be better and stronger, but there are other businesses where you will see a permanent impairment of those businesses. some of the airlines, where people -- it may take them much longer to get out of this downside so you really need to go on a business by business basis understanding that. taylor: it makes sense in times of a selloff by active management has firmly cemented its place here but i also wonder, with the ecb buying, do you just buy whatever central banks are buying because you cannot fight the fed or the ecb? katrina: the nice thing about the central banks in europe is what they are doing is supporting the banks and the banks in europe have been criticized for having such shallow capital market and deep

banking relationships but this downturn has shown the strength of that model because the ecb, three supporting the banks, is directly supporting those corporate's, so we think the european markets are very well placed from that point of view. in terms of trying to fight the fed. you never want to fight the fed or the ecb. we are coming in on an equity you buy equity basis and i think what we are seeing is a lot of companies where someone is just -- the market is throwing out an entire sector and we think that is really where, as you mentioned, active stockpicking has a real place because we can go in there and analyze the underlying fundamentals and get those great opportunities. thank you so much for joining us. of europeannager equities, katrina dudley.

still ahead, the european central bank stepping up pressure on lenders to curb dividends and we are looking ahead at what else we can expect amid the coronavirus crisis. we get an interview with the ecb's top banking watchdog, next. this is bloomberg. ♪

taylor: now, the ecb expects banks to fall in line with this recommendation to delay dividend payments until october. but if they do not, supervisory board chairman says he could take a legally binding steps to ensure compliance. he spoke to bloomberg earlier. same that applies for dividends. our economies have taken extraordinary measures during

this pandemic and i think banks, shouldlders and managers of where we are right now and trying to preserve capital as much as possible. it was 30 billion euros that were in the pipeline to lead the center of so it was important for us to go out and get recommendation. it is less in terms of quantity and the fact that they are to a large extent already paying, but still, our recommendation to banks is to be very moderate on that as well. haidi: what happens to banks that do not stick to your suggestions. what levers can you hold -- pull? >> banks are reacting very

positively, taking responsibility and that is an important step for showing, you know, corporate responsibility in a difficult time for our economies. if banks decide not to comply with the recommendations, we will decide whether we are taking other measures. we can take legally binding measures if need be. haidi: that was the ecb supervisory board chairman speaking to us and we will be getting more on the push to describe dividends in europe with rishaad salamat, joining us now. on the line. rishaad:. just goingg kong, with what they announced in the u.k., with their fourth quarter dividend. it was going to be 21 hong kong cents. it was meant to be paid two

weeks from now. all against the backdrop of pressure on financial institutions to do something to scrap dividends and review cash bonuses as well. britain's banking regulator saying there is a need to retain capital as the pandemic upends the industry as a whole. rbs, hsbc, standard chartered. all axing their dividends and saying there will be no payments this year and that is coming from the prudential regulation authority which had written to lenders asking them to cancel payment and did say they did not expect banks to pay any cash bonuses to senior staff just to make sure they are tier one capital ratios and other ratios are in check here as well. money. a lot of britain's five biggest banks have plans to play out 7.5 billion pounds in dividends just over the next couple of months. barclays is due to pay more than one billion pounds on friday

here as well. that is what we have at the moment. in germany, things have actually also been in a similar vein broad and. to suspend dividend payments and this is so they can assistancealify for which was designed to ease the impact of this crisis here as well. , allovernment in berlin part of an aide program which involves loans and guarantees from the state bank here as well. the goal is that the credit does beingd up essentially dispersed to shareholders so you cannot be taking money from the state and at the same time, giving it to shareholders in germany so that is where we are with this. off of this is coming the news of the coronavirus. new york city has now reported 1096 deaths as of 5:00 p.m. new york time so about 1.5 hours

ago. new york city coming out and 1096g there have been deaths, so of course, we hold all of this back into what is now a global story. we see sort of the tensions and the fear pickup in new york. what did we learn from spain and italy? is there any indication that social distancing is working, that the flattening of the yield curve -- the health curve, not the yield curve, that the health curve is working in some of those cities and countries over there? >> absolutely. this news coming out of new york here as well. this of course across the backdrop of italy, the worst affected country after china in the world, after the u.s. here as well and even donald trump's warning of a painful couple of weeks ahead. top public health official

which coordinates the white house coronavirus task force, saying 200,000 americans are likely to die in this outbreak as a whole. deathsk cases surging in as well. italy having all sorts of other problems with social tensions building up between the north and south of the country and on top of that, spain increasing over the last two days, it's locked down in various cities as well. back to you guys. our bloomberg markets coanchor, rishaad salamat in hong kong. coming up next, we will be taking a look at the latest in china. graduallyinues to reopen its economy and its financial service industry. we will be in beijing for the latest developments. this is bloomberg. ♪

>> from the coronavirus, we were going to be globally oversupply on energy to begin with and the dispute and desire to pump even more makes this oversupply even worse. >> we think it is down significantly. 15 to 20 million barrels per day weeks,over the next few which is going to contribute to an approximate 5 million barrel a day decline for the year, so you are going to see lots of restructuring, some failures, and lots of challenges in the

permian basin and we think the permian will actually shrink this year. year tore guiding this capital spending over $4 billion. be reduced that by $2 billion so think about it coming down by half. >> we believe it is not the coronavirus epidemic. the price is good go back to maybe $50 per barrel. >> this is the billion dollar question for many of us. sayink it is too early to how this will unfold. leading oil executives say oil sees its worst quarter ever and we are looking at that ramp up in saudi supply as well. thisrlier, we discussed with the president and ceo, scott sheffield. take a listen.

we started with numbers. we thought they would be a supply and demand loss of 10 million barrels a day. that number is up to 20 and some analysts say it is high as 25. we agree with you but we need to get away from six dollar oil. the oil in delaware, from all the new wells coming on, getting six dollars per barrel. in the midland basin, $12 per barrel. something has to happen, and there are estimates that we will shut in 10 million barrels a day by ihs and that came up yesterday. oil is being shut in around the world. we are asking about fairness. thfairness question in the state of texas is that some producers will not be able to sell their oil at all over the next several months. the majors will be able to sell but the refineries, pioneers of the world, we want the commission to step up to the plate and treat everybody fair

with a similar cut in production. taylor: why? the shalests say industry should have been shaken out but the capital markets were open and you guys do need consolidation even though the assets are still good. why prolong that? leverage, 74 independence, only 10 that really survive. we will have a great balance sheet. 64 of them. 521 if we see the current strip play out like it is in 2020 and 2021 so they will be no consolidation because people don't want to buy companies that have too much debt, so there will probably be only 10 left. what is important is energy security and energy independence. in the have been industry for over 40 years, i

want to get back to importing 60% of our crude oil from the middle east and highly dependent upon russia, saudi arabia, and our gasolineply needs for the next 20 to 25 years. taylor: let's play it out and say that they say ok, russia says ok. does that mean prices are going to rise to what? scott: there's some type of uniform cut and alberta is also,g at it in canada talking with north dakota. they do not have the right to prorate but they are looking at stopping all flaring. there's estimates that would cut 10% of their production. the state of oklahoma has the right to prorate that it could raise the price that away from $20 up to 30 so $30, we saw a $20 price drop after march 6 from the time that saudi and russia blew up the meeting in vienna and we have seen a $20

drop. ofneed to get at least 10 that back so i think that's probably the best guess if there is some type of coordinated cut. what is the appetite among your peers among all the different players? you ande gallagher -- mike gallagher are in a good position. before last friday, we had probably many producers did not want to prorate because their argument is that they want a free market. is that thereback has not been a free market in oil. over around 1960, having their 60th anniversary this year. they have been probating oil since 19 six eight, for 60 years, so with what happened friday night when purchasers all

over texas told people to stop completing wells, you will have to produce -- reduce production, there is a groundswell happening with independents that something has to be done and it has to be done fairly and if not, the small and medium producer will not be able to sell their oil and predict for several weeks to months until this virus ends. was president and ceo scott sheffield. i want to take a look at how markets are opening because we do know that in new york on tuesday, we ended with a wild quarter. looks like some of those losses are extending now into the futures market. s&p 500 futures now off about one point 2%. you are getting some positive uptiment over in australia, 1.8 percent or so and you are continuing to see some yen strength. it is small but you were starting to see a little bit of the dollar weakness. you had a lot of dollar funding

issues. you are getting some relieving the pressure on the dollar and going into some safe haven yen here is another sign that you are starting to get some of those traditional safe havens that are starting to come back and work the way in which they should. i do want to bring in our correspondent, selina wang, because a lot of the disruptions that have been caused by this pandemic, and despite those, trying to continue to open up this financial services industry . we enter april as part of the trade agreement signed with the u.s. in january. let's cross over to beijing and to selina wang. what is the context behind what is happening today is april 1 approaches? despite all of these

external challenges including the trade war, china has been steadily opening up its financial system, inviting more of these financial services companies set up shop. china is allowing full ownership of life insurers, futures, and mutual fund companies in stages. the foreign caps for security firms, off. even a tiny slice of the $45 trillion financial services industry would be incredibly lucrative and our intelligence andmates that foreign banks security companies could be raising profits by 2030. according to a reporting in the industry, you have firms including hsbc, morgan stanley, and goldman sachs, already approved for majority stakes in their local joint ventures and firms like bds that have applied

for majority stakes. citigroup would generate more than $1 billion of revenue from its china-based clients, planning to set up a wholly owned securities business. on april 1, firms will be able to apply for licenses for the first time to set up mutual fund management firms. blackrock and vanguard are planning to go that round, boosting the ownership of that. management industry could be overseeing as much as $30 course, in 2023, but of there are plenty of hidden barriers including the challenge of a market dominated by government controlled rivals as well as lengthy and opaque processes. of course, all of this opening is beneficial to china as well. it helps them improve the

competitiveness of their domestic industry while bringing in on expertise and capital at a time of concerns of long-term financial stability. we had that rare array of of hope fromray the chinese pmi. what are you expecting from the beginning today? is that it consensus will come in lower than the official reading you just got. inwill still be contractionary territory but slightly better than last month. that is because this reading is more focused on the export oriented firms and smaller companies that have had a harder time restoring production. you mentioned the hope we saw from the official reading during this song rebound. indicate intent -- sentiment. output is a long way from

normal. companies across china are dealing with challenges as the pandemic escalates in china's mediator trading partners, dampening global demand. at the smaller private firms, it has been a pickup. liquidity are still issues. all those containment measures in china are going to remain in place for a while. >> thank you so much for joining us. selina wang, our china correspondent with us in beijing. we will be digging deeper into china's financial reform effort. later on in the hour, we have -- a guest. . > the closely watched indicator, the survey, out just

moments from now. we will be getting instant reaction from the monetary policy board member. also to give us her thoughts on this potentially monumental amount of stimulus that japan and china are getting through. this is bloomberg. ♪

taylor: selina: i want to bring you some -- taylor: i want to bring you some headlines. they have filed for chapter 11 bankruptcy. we are awaiting more details potentially about this bankruptcy but i would guess the a lot of this is due to slowdown in some of the stories we have been seeing given that the lockdown we are under and the lack of being able to travel to get coffee or whatever it is, so they are now here filing for chapter 11 bankruptcy here in new york. i want to get you the first word headlines. new york city has overtaken china's hubei province in the number of reported virus cases with more than 9000 infection, taking the total to 76,000. int is the most infections the u.s. which has had the most cases worldwide. hubei province is home to wuhan,

where the coronavirus was first reported back in december. areopefully, as the experts predicting, as a lot of us are predicting, after having studied it so hard, we are going to start seeing some real light at the end of the tunnel but this will be a very painful, very painful two weeks. japan is proposing its biggest ever stimulus package to counter the spreading coronavirus. at $550 is valued billion and its prime minister, shinzo abe, seeks to avert a further slowdown. last weekend, he promised a package even bigger than the support offered in the wake of the financial crisis. the proposal from the ruling -- gives no details of how the plan would be funded. ononesia cut corporate taxes the budget deficit from the asian financial crisis to theort the economy through

coronavirus outbreak. the government is allocating thest $25 billion to fight pandemic, posting the deficit above 5% of gdp this year. the president said the corporate tax rate would come down from 25% to 22%. singapore's de facto central bank says lenders will offer relief for private and business customers during the virus upheaval including a freeze on mortgages and business loan payments and cuts to credit card rates. banks and finance companies can defer payments through the end of the year. the singapore banks association says the shock to the economy is unprecedented. 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 taylor riggs, and this is bloomberg. japan's report is

expected today and that is expected to really show some major declines when it is released shortly. economists are expecting negative readings for the first time since 2013. for more on what to act and whether this will be sustained in a state of the japanese economy, let's bring in the university professor, a former bank of japan policy board member, and she joins us now. wonderful to have you as always and thank you for joining us. in terms of your expectations, it is pretty much a given that we will see pretty depressed sentiment going into this survey. >> we are paying attention to what has happened to large companies. as you said, we think there will be a big fall and enter into negative territory's probably outlook three months ahead, also further decline in the index, but i think we should pay more attention to what will happen to

large services sector because until december, the previous survey, the index was quite good. so because there was a lot of construction, estate activities, information services activities, and then lots of inbound tourist were coming so it was very resilient but i think this one for the services sector index will have a very sharp decline in much more than the manufacturing center so i would like to see what would be the inel of this index manufacturing sector. people say it is falling from 20 in the previous survey but it can be negative and also the outlook continues to see negative. >> do you expect we will get this ¥60 trillion stimulus

package from prime minister abe given we can see something similar in the wake of the lehman collapse? to 10% of equivalent japanese gdp. not all money comes from the budget, so in terms of budget allocation, ¥22, 4% of gdp. still quite big. this money will be used mainly as a cash transfer to the individual people who are suffering from this crisis and also providing lots of cheap money and guarantees for the many small companies. the amount wet is needed because we already have a we need out put gap, so that. but that money cannot create demand. we don't have inbound tourists and we don't have a lot of soand for foreign countries

these are to offset the negative output gap. it cannot create demand so many companies will continue to suffer. >> i want to hang in here because we are a few minutes now from getting a lot of these surveys, and we are indeed coming out with them now. it does look like march large manufacturing index has fallen eight, better than an estimate of a drop of 10. the next large non-manufacturer in hong kong is seen at negative one, in line with estimates at negative one. let me take you through the small manufacturing index as well, coming in a little bit at -15than expected versus estimates of -20, so again, let me recap everything that we are getting here. it does look like the large

manufacturing outlook has seen a drop of 15. that is a little bit worse. that is better than a drop at 15. the large manufacturing index also looking better than expected at a drop of eight versus estimates of a drop of 10, so overall, let me sort of get your quick reaction. it does look like things are coming in a little bit better than expected. does that give you any hope here? or do you think we have a lot more to fall? that does not mean we can be optimistic because first of all, people made a survey in the middle of march but things are getting worse in japan now. the number of people infected is growing. we do not have a lockdown yet start tompact, we will

feel it in april so we have to watch very closely what will happen at the end of march and also april. take awayat can you from the diversions we are seeing in the manufacturing index and the service is index? it looked like services had been holding and they're a little bit more. you are starting to see some of the optimism but it was not as bad as manufacturing. what does that tell you? the services sector is quite complex. think activities are dropping, but in the meanwhile, if we look at the drug, sales are increasing in the february data because of fear driven demand. people try and accelerate consumption now to prepare for

the worst case that people have to stay home. this kind of fear and demand was created so depending on what sector you look at in the services sector and the total, it looks good, but once you look seehe various sectors, you the trend now. in terms of the ammunition that is still available to the bank of japan, boj is making changes to allow them to buy more across the short end of the. how much flexibility do they have in terms of bond purchasing without distorting the curve? >> the government is going to have this big package and probably, they are going to increase the japanese government bond issuance around july so there is still time, but people may start to think that maybe

the government will issue too many bonds and that may lead to the higher yield curve so the bank of japan may start to the yieldo stabilize curve. we might start to see more government bond purchases from april. you to thenk professor of economics and former bank of japan monetary joining usd member, from tokyo. and we will have much more on the hong kong survey on the outlook for japan. strategist equities kathy joins us later. this is bloomberg. ♪

haidi: this is what we are seeing in terms of the start of a brand-new quarter. aussie stocks seeing their worst quarter ever, down 25% and this is what we are seeing in trading on wednesday. upside of 2% going into the relief -- release of those rba minutes from the march 18 meeting where they did have the emergency rate cut and we are seeing gains across the rest of the markets that are trading. going into the start of trading

in tokyo and seoul, that is looking weaker. over the next hour, we will be getting reaction to south korean trade data as well as more analysis on the coronavirus outbreak and the impact on the economy. this is bloomberg. ♪

haidi: i'm haidi stroud-watts in sydney. asia's major markets have just open for trade. shery: -- >> i'm taylor riggs. welcome to "daybreak: asia." here are the stories we are following. asian markets enter a new quarter after one equity bulls would prefer to forget. level lastell to a seen in 1987 as the coronavirus

threatens widespread recession. president trump warns america to prepare for a painful time as new york surpasses hubei province in reported cases. spain suffers its deadliest day. show me revenue jumps on robust growth in internet services and overseas business. we are joined by the company president this hour. we are just getting the south korea trade balance. bellwetherly the indicator for how regional and global trade is faring. it is to the downside. we were thinking given the 20 day data looking hopeful that we were going to get again when it comes to it. imports are seeing a contraction of .03%. the key exports number year on year for march, a contraction of

.02%. we have been looking for a modest gain of 1.6% and flowing from the 4.5% growth in february. this is somewhat of a downside surprise. during that time, it returned to work in china. economic activity and reopening at about 90% of the workforce getting back to slowly full capacity. that hasn't really reflected through. we are also seeing optimism and demand from semiconductors globally helping support some of those overseas shipments. we are not seeing indications of that at all. kiefer of a contraction, full month experts -- exports for south korea. let's look at how the markets are faring. looking like a lower start when it comes to trading in japan and tokyo. outo just getting the news that the extension of schools may have been through to early may. we are waiting for confirmation.

a slow start to the new quarter for japanese shares. nikkei down by 1.5%. also off. japanese stocks suffering their worst quarter since 2008. the survey was in great. we are expecting massive stimulus to be announced from the japanese government. in the meantime, we see a pretty mixed picture when it comes to asian stocks as we kick off this new quarter. australia is still holding up strong with gains of 2%. taylor: i want to take a closer look at the trade figures with the head of korea economics research at standard chartered bank korea. what are your pull him in our thoughts on this -- what are your per luminary thoughts on this? it looks like expected imports and exports are coming in on the downside. what is your early take?

why were we so optimistic? it was increase by 10%. i think the market was excited about it. if you look at the details, 10% more --, it was due to 1.5 more working days. exports, 2%. europe, 13.7%. of thedicates a lockdown u.s.. ask should days, we have expect -- we should have expected exports to slow down. 0.3% is pretty much aligned with my expectations. days was more working data. when you talked about the

u.s., i'm wondering how much further down we have to go, given the u.s. is just now in the last few weeks really starting to shut down. how much of this is a negative feedback loop, or can it get worse for south korea exports? it is a small sign of export slowdown. everything, it's not really a big number. we should expect a worse number coming next month. we should see a full month data. i have not seen it. this is looking at the data. the worst has not arrived. haidi: when it comes to demand out of china, how quickly do you

accept -- expect a rebound? it may not be a u shape the recovery. how much hinges on what happens with the world? china is going to suffer from that demand destruction globally. when i look at the first data, the exports increased 4%. considering a sharp drop in general, we see this as a u shape the recovery. i think we also see a very weak number for january and february production. chinese slowdown is going to drag on. i'm not optimistic we are going to see it appreciating. haidi: were you surprised the demand in semiconductors, given

the pickup of demand for products like laptops worldwide it and contribute more to that overall number? actually, yes. we expected it to be more. i haven't seen the full details. the first 20 days was very strong. increasing buying almost 20%. i need to see the details for the full month. semiconductors should have increased. haidi: what more options are there for the government, in terms of extra stimulus and support? what other options are there for the bank of korea to do more? has preparedment

100 trillion korean won. a stimulus package. sme'sre trying to support and providing more liquidity. 32,000,000,000,001 of fiscal spending. i think it will create more demand for consumption. when you look at the korean data, it is not overly bad. in february, it was 3.3%. export decreased like zero .3%. that's not horribly bad. 11% year in year. even though it dropped 8% once a month. i think korea's flexible labor

market is putting a safenet. the labor market, household income is knocked up unit salary -- unilaterally. we haven't seen a shock yet. the i'm worried about is main shock from abroad. the u.s. willrom come to korea. seen a worse economy yet. i'm more concerned moving forward. indicated, all of the sentiment has dropped over 20 points for the last two months. also, the industry production month-to-month increased 28%. the largest drop in the financial crisis.

moving forward, we should be more mindful about economic slowdown. going through those latest trade numbers. they did disappoint to the downside. it sounds like the worst is yet to come. let's get you the first word headlines. taylor: reports from the white house says president trump is prepared to delay certain tariffs for three months. sources say an executive order is coming, which would postpone the collection of duties on certain goods for 90 days. the order won't be applicable to tariffs the president composed himself, on china, steel, and aluminum from around the world. new york city has overtaken china's hubei province in the numbers of reported virus cases. more than 9000 infections taking

the total to 76,000. the city has had the most infections in the u.s., which itself has the most cases worldwide now. hubei province is home to where the coronavirus was proportioned in november. as the experts are predicting, a lot of us are predicting, we are going to start seeing a real light at the end of the tunnel. it will be very painful. a very painful two weeks. taylor: to europe now. -- haidi: to europe now. spain reported its worst virus day, with 9000 2200 infections. the news comes as the world health organization said curves from public amusement. italy also saying new cases have leveled off at a two-week low. health officials claiming a contagion has reached a plateau.

105,000 virus cases, the most in the world after the u.s.. taylor: still ahead, hours closer interview with the president of xiao me, china's number two maker. it beat analyst estimates and sees more recovery ahead. it is a big day for money managers all over the world. china opens its trillion dollar asset management market a little wider. professor joins us next. this is bloomberg ♪ .

>> supporting people day to day. those demands are still in line with the reasonable level compared to precrisis. >> the levels of activity are

now probably about 80% of what we saw in the pre-lunar new year period. >> the economy has been rather well. i think their rates right now, the rate cuts right now, are reasonably sufficient. >> >> many chinese >> factories have already been reporting canceled orders. with more cases, we are going to be more cautious in abnormal consumption behavior. me needs tonment step past stimulus measures. otherwise, significant risk of that stimulus may come in too late. some of our guests talking about the outlook for china's economy as it seeks to recover from the coronavirus outbreak. with china's trillion dollar asset management market open as are today, money managers now applying licenses for wholly-owned regional fund terms

for the first time. vanguard and blackrock are said to be among the names going down that route. let's bring in a professor of finance, who joins us now. great to have you. what is a better option for these foreign players in this market? is it politically easier to go in with a local partner? >> my short answer is it depends. historically, falling joint ventures. now this is happening. they can establish financial services. in china with 100% ownership. heard, severale firms may have already applied, but it seems to have slowed down because of the current pandemic situation. firms think some other

are likely to continue their joint ventures with local partners. have and are mostly benefited from the collaboration. they understand the value of local partners, particularly communications with regulating bodies and customer based. second, in the past two to three years, financial firms have been allowed to take control of ownership in their joint ventures in china. many firms did not take advantage of that relax in regulations. ownership may not be as critical for them. haidi: more broadly speaking, we have been talking about financial and structural reforms for the chinese economy for years. we see the same window of opportunity and willingness slowly close as it shifts to

maintaining a certain level of economic growth. we heard from the pboc yesterday suggesting that maybe they should consider dropping the gdp target for this year, because either way it will be a horrible number what finally gets achieved. how do you gauge the appetite in beijing at the moment? taking the economy and financial system through some of these very difficult reforms. clearly, it will be a good idea not to focus so much on gdp growth. growth rate in any country is not likely to be sustainable at a high rate. at a certain time point, the growth will slow down. it is not really a possible target. the pandemic gave such a big shock to economic activities. i think it would be reasonable dealing with the situation and

allowing some of the effects to slowly take in and if we don't deal with taking the short-term loss, the effects will last much longer and might be more detrimental. what will the onndemic affect be these fund managers going into china as of april 1? does it slow it down? we have noticed a lot of the attention has been taken away from this because we are so focused on the pandemic. wondering if you see any of that slowing down because of the virus? ofthere are some signs slowing down. it is completely understandable, because the financial market globally is taking a plunge.

there's a lot of uncertainty and a lot of liquidity risk. for theit is reasonable financial institutions to take cautious debt instead of going into the chinese markets. taylor: what further financial reform would you like to see? i think china has a long way to reform their financial system. my research is focused on this area for decades. my strongest advocates on this to selecthina needs unique characteristics in their financial system rather than adapt a u.s. or german model. taylor: that was australian national university professor of finance meijun qian. we will hear more on china's

financial reform. we are joined by ubs' ahead of china global market. is bloomberg. ♪

haidi: let's take a look at some of the breaking news crossing the bloomberg at the moment. we have a line. banks struggling to adjust to the new normal in light of the economic slowdown prevented by the coronavirus outbreak. will beim dividend recommended or paid in 2020. that comes on the back of a number of banks making these changes, cutting pay to executive pay levels. we will be getting more details on that as they get to us.

criticism has escalated around the transparency of china's reported coronavirus cases. we are waiting for the numbers to be reported wednesday. generally, they have just released the new data taking into account symptomatic patients that don't have symptoms. is not clear whether they have recovered or are still testing positive. let's get some more details and clarity from selina wang, who joins us now. there has been in norma's --ticism domestically enormous criticism domestically from doctors and health care professionals, and also more globally. china done to address what others say is lack of transparency about these numbers ? growing has been a course of domestic and international criticism about how transparent they are on the truth since outbreak.

that was being both reported in china's hubei province, even though it has a population that is one third of hubei. we did get the very first time china is releasing data on a symptom medications. -- asymptomatic patients. systems are not under observation as a march 30. 205 were people entering china from abroad. it's not sure what that number exactly is. not sure if it's only people under medical quarantine, are also those who are symptom-free, have since recovered, and been released. the growing criticism really starting to escalate. the media reporting casesit's nf asymptomatic virus infections were being found behind every fact chinae the confirmed it had become zero

cases for the first time two weeks ago. really doubts about whether or fact china not this epidemic is completely under control. china has been saying it traps in these cases. if and when they do develop symptoms. growing concern here for researchers based on the patients that don't give symptoms. no easy way to really tell if they are sick. taylor: what else can we expect from china's pmi when it comes out later today? selina: the consensus forecasts for this march is for them to come in lower than the initial reading. set to come in at 45. they are in contractionary territory. the reason why it is lower than the official reading is because the reading is more focused on export oriented parts.

the smaller companies that have had a much harder time restoring production. when you try to analyze these pmi readings, what they really indicate is sentiment. it doesn't show whether or not output is back to normal. the surveys are really just asking businesses to see how big it is compared to last month. the official reading, the big jump shows they have increased. we had historic contraction. smaller firms are dealing with supply chain issues, staffing issues, funding and liquidity issues to a much greater extent than larger state owned enterprises. that being said, the inclusion we have seen so far provides a glimmer of hope that as bad as the virus hit, it could be relatively short-lived. taylor: selina wang, our china correspondent in beijing. theng up next, details on

minutes from the rba's unscheduled meeting. all of that, next. this is bloomberg. ♪ shouldn't you pay less when you use less data? now you can.

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haidi: you're watching "daybreak: asia." we are getting the minutes of the rba's ad hoc emergency meeting that took place on march 18. just getting some of the details in that set of minutes to come through. we have the emergency rate cut and the announcement of the rba embarking on qe, given it has hit its lower bound of a quarter of 1%. meeting convened to specifically consider the options of the monetary policy response to the coronavirus outbreak and the shutdown of the global and australian economy.

noticing financial markets had been volatile, there have been shortfalls in risky assets. really a struggle for market participants to price these risks. also noting liquidity in money markets had been very poor and the corporate bond issuance was essentially closed to a lot of borrowers, saying members of the rba had no appetite for negative interest rates. that is interesting, in terms of gauging what extruded in every easing measures were still available to the reserve bank of australia, saying the focus of their monetary policy package was to ensure funding costs remain low. this coming through from the meeting on march 18. government bond markets really showed signs of dysfunction. many participants had been looking to liquidate their portfolios, build a necessary bridge for recovery, and ensure those funding costs remain low. keeping to the end, in terms of

what they were talking about with concern to a further reduction in cash rates, there would be substantial easing of monetary policy. they would really keep that level for some time to come. i know you have some more indicators we should be gauging at the moment. taylor: a whole slew of pmi data coming through. i want to start with south korea. march manufacturing pmi dipping down to 44.2. that was versus a 48.7 in february. this is as you had other countries, like indonesia and the philippines see their march pmi fall to the lowest on record. pmihave the philippines dropping down here to the lowest on record. south korea now to the lowest since january of 2009. indonesia coming in, as well. a 51.9.sus a few of these falling into that

contraction territory. 50 is generally the line between expansion and contraction. you see a lot more of these manufacturing pmi's dipping back down either into or further below 50, with a few the lowest on record. south korea is another big one we are watching. versus 48.7 in february. for some of the market reaction, i want to bring in our chief asia economics correspondent. i know we have only given you a few seconds to digest the news, but take any surprises that stand out to you. we will continue to get her on the phone. i will say that this is a pretty big surprise, given a lot of these manufacturing pmi's have fallen to the lowest on record. we will continue to monitor all

of these as we get them just starting to come out. that's get a check on how some of the markets are faring. you had u.s. futures opening up in the last few hours. you had a lot of weakness on tuesday. that continues to translate into some of the overseas markets we are looking at. we are also about 1.6% or so on the nikkei. he further see some yen strength, which is correlating into dollar weakness. the safe lot of havens, like strengthening yen. behaving the way in which they should. as you can see, futures falling, as well with some dollar weakening. crude is catching a bit. crude stronger by 1.4%. the brent markets are not holding up, as well. coming up next, shout me's latest results were upbeat.

an exclusive interview with the president of supply chain and intellectual property. all of that, just ahead. this is bloomberg. ♪

asia pmi's all in contraction, except taiwan. i want to get reaction to all of this. joining us is our chief asia

economics correspondent. what is your initial take on this? >> it is clearly a soft read across the board. march was meant to be the month when we at least started to see things bottom out. that was the scene coming out of china's pmi yesterday. about as talking recovery, but at least hitting the worst. the only have to look at korea's weightings. -- readings. the lowest since january 2009. broader parts of the region. taiwan is nudging the territory. that is one positive indicator. across the board, it was just reinforced, the downward pressure these export economies remain. taylor: what is your biggest downside risk from here? all accounts, what people

talk about now is perhaps china might get back, people go back to work. recovering, the slowdown in the rest of the world will hit china hard. it will hit the rest of east asia, as well. even if the virus gets under control in this part of the world, they will run into this wall of self demand from key export partners. that's why a lot of people are paring back their expectations for recovery for the individual economy and the world. v shaped recovery seems to have gone. rangeushing the forecast later in the year. that's what these manufacturing and export economies in asia are looking towards, when the virus will be controlled globally, and when globally it will get back in sync so everything is moving at the same time.

a u shaped recovery is looking optimistic. thoughtsus to get your on the meeting minutes from the rba ad hoc meeting on march 18. it was notable they said there was no appetite at that meeting for negative rates. what does it say to you about the options that remain on the table in this part of the world, it seems we that are going to be at these levels for quite some time to come? >> exactly, a very sober set of minutes from the rba. they started to rule out negative rates. the other takeaway i saw was the focus was about funding costs. this was a meeting where they adapted the yield curve controls for the first time, and since the minutes have come out, that policy seems to be having some impact. buying federal and state bond in australia.

it has gone efficiently. on the funding side of things, they are at least heading towards mission accomplished. the overall tone is pretty downbeat. economists are warning about a downturn since the 1930's. i think the message from australia is even if we don't put negative rates, there's certainly not going to be talk about moving away from their emergency crisis policy settings anytime soon. i think that's the lesson for much of the developed world. central banks are pushing to go deeper into the monetary policy. i don't think anybody expect them to achieve escape velocity. always good to have you, our chief asia economics correspondent in hong kong. let's get you caught up-to-date with the first word headlines. confidence among big manufacturers and japan fearsted in march, adding

of a recession and putting increased pressure on the government to deliver a virus rescue package. amongrvey shows sentiment car and electronic makers falling, hitting the lowest level in seven years. japan's worry is the virus in the u.s. and europe could trigger an export driven downturn. afterkorean exports fell a brief time in recovery as the coronavirus and hammers supply chains and suppresses global demand. declined .02ment percent last month from a year ago. the expectation has been 1.6% gain. the actual picture could be even worse as march has more working days than in 2019. exports to china. the u.s. and europe rose. indonesia has cut corporate taxes and shelved a cap on the budget deficit from the asian financial crisis to support the

economy throughout the coronavirus crisis. the government in indonesia almost $25 billion to fight the pandemic, pushing the deficit above 5% gdp. the corporate tax rate would come down from 25% to 22%. singapore's defector central banks were also relieved during the virus upheaval. including mortgages and business known claimants, as well as cuts to credit card rates. the monetary authority says finance companies can defer payments through to the end of the year. the bank association said the shock to the economy is unprecedented. reported a 27% year-over-year jump in fourth-quarter revenue, beating expectations thanks to robust growth and internet services and overseas business. theing us from beijing is

president. great to have you. i want to talk about the recovery you are starting to see within the chinese smartphone market that goes against a lot of what analysts have said. what does that recovery look like to you? >> prices in china were affected a bit. most of the stores were closed. short-term hours with significantly low customer traffic. however, when compared to the package on the online channels. we have seen smartphone shipment rebound quickly in late march. showing the resilience of smartphone demand. opened many stores.

right now it is 2000 stores reopened in china. so we see recovery. right now, the smartphone market, specifically, is maybe normal january demand. this is what we are seeing. our manufacturing capacity also recovered close to 90%. taylor: curious about the increase you have also seen in some of the internet services business. how much of a boost was that, given the shutdown of the economy during the coronavirus pandemic? user traffic of content driven services. for example, video and online games reported strong growth as

people stay at home. meantime, businesses can be impacted. customers decreasing budget. some increases and some decreases. overall, i think we grow internet services. the chinese government is speeding up network construction for 5g to drive infrastructure investment. growth coming out of the coronavirus economic shutdown. what are your estimates as to what the 5g market in china will look like by the end of the year? are very uniquely positioned. 2019, we adopt a prudent operation strategy.

was the transition from 4g to 5g. we operate on business and focus on maintaining healthy cash flow at an level. 2019, first quarter of inventory decreased from 65 to 54. compared to 2018. the total cash resources amounted kept beating the u.s. dollar. we have zero inventory. we are well-positioned to capture the 5g opportunities. of massphone tour market by segment. very confident in 5g. in china and also the rest of the world. we are not only launching 5g products in china, but also outside of china. for example, europe.

you talk about the rest of the world. i know there is expectation that there is a potential second quarter hit to production in india, in particular. what does that impact look like? how quickly do you expect a rebound? >> right now, most of the areas, europe, india, especially europe, they are in the outbreak period. experience, china in the next may 2 or three weeks, we will reach to the peak and control coming down. business will be hit in the april timeframe. we will see some recovery in may

end june. right now everything is shutting down, including manufacturing and logistics services. online business. instill see some demand india right now. we will closely monitor the progress. i think the indian government is making the right decision, and early decision, to fight against the virus. i think this is good. we hope to put the virus in control in the next couple of weeks. we will continue to wait and see the impact and the slow economic the opening. that was nice president joining us. we are just hearing from the boj governor speaking in the

japanese parliament. interesting news when it comes to the limitations of the boj. extraordinary monetary policy program. saying when we get near to the bond buying target, some adjustment may be needed. it doesn't mean there are no limitations to the program. two of the noteworthy thing he has been saying, buying bonds to achieve price stability target is really the aim. the bank of japan governor speaking in parliament. we found out more yesterday, in terms of the bank of japan sweeping changes in april 2 its bond purchase programming. giving themselves more flux ability to buy on the shorter end of the curve. also not wanting to create distortions across the yield curve. really reflecting the strong will to provide funds across the entire curve. much more to come on "daybreak: asia." this is bloomberg. ♪

haidi: chinese airlines have reported results. earlier this month, we had china's aviation regulator numbersng airlines had falling 84.5% in february due to the coronavirus outbreak and subsequent shutdown of the economy.

securitiesed from group transportation and automobiles research analyst. great having you with us. i'm wondering how we will place chinese airlines, given the implicit state support and the comparatively quicker recovery of the chinese economy and restocking of the chinese economy and what that means for the recovery across the sector? in china, prices reduced. the aircraft -- [indiscernible] from now, the cost is very

small. the chinese airlines do not policies.om these the volume is very small. support is continued. recoveryion demand rate, the china airlines will benefit much more in the future. haidi: out of the major carriers, which is best positioned to recover? china eastern didn't suspend dividends. it clearly doesn't have pricing liquidity concerns, even though

the airlines are widely expected to miss earnings. expectations, china is looking more likely to see a quicker rebound. not bethe downturn will recovery quicker. will not -- 13% as to the normal year. that was jing zhang, philip securities group transportation and automobiles research analyst. we were getting other news. the cicc trimmed air china's target prices by up to 24%. this is as the covid-19 outbreak

has affected the company's earnings outlook. impact,ing the virus the estimate of the 2020 that to 40 reduced by 99.9% million yuan, with the first quarter like to be the worst hit. we will have to wait and see how the other quarters develop. this sort of discontinued esteem we have been talking about, how these airlines continue to struggle with the drop in demand on travel. i do want to get a quick check of some of the latest business flash headlines. operator, carnival, is urging authorities in florida to accept humanitarian grounds to call in american ships off of fort lauderdale with nowhere else to go. dozens of passengers on the van dam have flulike symptoms.

the ship has been denied entry to ports across latin america as it sailed north. carnival it says the ships are failing to close the place of last resort. in office sharing startup we work is set to the developing customers 50% of their rent for longer-term contracts. we are told some of the discounts are aimed at the u.s. on month to field and would agree to trade places as short as two or three months. china's leading property developer reported its first decline in annual profits in four years. , justofit tumbled 48% under $6 billion in the 12 months through december. that's more than forecast in the bloomberg survey, which was revised after a profit warning was issued last week. still to come, we have

these exclusive interviews that you don't want to miss. we will be speaking to singapore's minister for manpower and the biocon chairman.

♪ >> president trump warns the u.s. to prepare for "a painful passes thee u.s. chinese hubei province, as the u.s. suffers its