♪ shery: welcome to daybreak asia. i am shery anh in new york. haidi: i am haidi stroud-watts in sydney. we are counting down to asia's major market open. top stories this hour. president trump overly questioning if china deliberately released the coronavirus. oil extends its slide in asia, trading near to decade lows as

the opec-plus curbs doing little for the global glut. the virus drags on demand. policymakers are focused on the economic impact of the virus. we will hear from a policymaker later this hour. shery: we are seeing downside for u.s. futures. this coming on the back of a second straight week of gains. we have seen coronavirus cases start the united states to stabilize. we are seeing coronavirus debts and cases here in new york -- coronavirus cases here in new york start to decline. brent is down. there was a loss of 8.5% on friday. there is a gloomy outlook on oil prices, wti at the lowest level

on record. haidi: we have been listening into president trump speaking at the daily coronavirus briefing at the white house, talking about additional testing and stimulus and conversations with the democrats coming close to a deal. president trump saying vice president mike pence will be helping -- having discussions with u.s. governors when it comes to shortcomings in testing in information will go ahead terms of capacity for u.s. testing. the president saying he is working on using the defense production act to get more jobs swabs into circulation. what was your take away from today's press conference? ros: it continues, but some of the things he has talked about,

the call vice president mike pence will have with governors monday, to talk about whether they may be leaving coronavirus testing capacity on the table and not using wisely everything they have at their disposal. he mentioned different labs and testing companies, quest most are familiar with, and squeezing out everything that can be done. -- to the point where they can implement the federal plan he talked about last week. reopening the economy and testing is the centerpiece of that. there is a suspicion at the white house the states could be doing more. a lot of governors are pushing back against that. that is where we stand. mike pence has a very good relationship with money state governors. we will talk about that

tomorrow. trump said he will implement the defense production act to increase production of certain medical supplies. he has gone back and forth about the dpa several times. does he want to do it or not? he is using it as a stick and carrot. he did not mention the company he would use for that. it is making sure the states, federal stockpiles have the gear they need going forward. shery: he mentioned saying he let china know that he is not happy with them. he is keeping the pressure on china for their role on the outbreak. ros: that is right. as we discussed in the last hour, certain republican lawmakers talked months about china's culpability and letting the coronavirus go worldwide.

president trump has come on board with that in the past day or two. it remains to be seen what he will do in terms of challenging china or asking for an explanation. he said yesterday if it is a mistake, it is one. vice president mike pence talked about that today. it looks like trump wants to continue down this path. also looking to more of what the w.h.o. did or did not know, who knew what when. ticking away from the domestic response to the coronavirus. more about how it has spread around the world, landing in the u.s.. more than 180 other countries as well. heard president trump

saying there will be talks with democrats. they could see a nice deal being done on additional stimulus. are we going to see more relief for small business as there has been criticism with the measures of funding, if they have been targeted enough. ros: that was an interesting report today about the large publicly traded companies, how they have managed to get millions of dollars from the federal ppp program. democrats want in terms of a second round of funding, controls put into place so your local pizza parlor or drycleaner gets to the head of the line on that, which has not been the case so far. we have had larry summers talk about how absolutely imperative it is the smallest businesses, thatom and pops, get

money. seems like the actual congressional effort to get the funds appropriated will go ahead for the next 24 to 48 hours. there might not be a vote until thursday but the sides are coming together. there was a call on the hill, mitch mcconnell, trump, talked about what they would like to see. seems like the white house is signing off on the idea of $75 million for hospitals, virus testing. that has been a sticking point for democrats and republicans. eight -- aid to the states is necessary but it could be in phase four. there is a steady stream of news to see if the funds will get nailed down, what is the wording to address the issue of the smallest businesses.

i think it is too early to tell, but democrats are keen for that. shery: ros krasny with the latest on president trump and his same -- stimulus measures and handling of the coronavirus outbreak. says testing of people showing no symptoms of infection areal only a tiny fraction suffering. the samples were taken in wuhan, where the virus was originally reported. more than a quarter of a million tests were taken this month and were positive. virus cases in india have surged with 1400 new infections taking the total above 16,000. confirmed cases have been rising as india steps up testing with known infections up 78% last week. the true number could be far higher with only 370,000 of

india's 1.3 billion people tested so far. western europe is reporting a decline in pandemic cases. coronavirus fatalities in spain rose 410 to over 20,000, the smallest one day climb since march 22. italy had its fewest numbers of death in a week. data from germany and the u.k. show an improvement. iran is calling on the international monetary fund to resist american pressure and improve financing to alleviate the coronavirus impact. this will board -- shore up the economy battered by u.s. century bank falling oil prices. washington says it will block the application but the original director says the request is proceeding. 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 andrea mitchell. this is bloomberg. we will be joined by oxford economics lead asia economist who will be reviewing a busy week ahead on the asian agenda. and looking at japanese export figures later this hour. bloomberg is expecting a trade balance showing a deficit in march. this is bloomberg. ♪

we are expecting key economic numbers around asia this week including some of these, south korean gdp numbers, japanese inflation data. we start with china's loan prime rate, due out in the next couple of hours on the poised to fall

in terms of the latest but not the last effort by the central bank to support the economy. let's look at what to expect with the oxford senior asia economist. we could see incremental measures from the pboc in light of what was a terrible but not surprising set of growth numbers friday. >> [indiscernible] some of the action have already undertaken. the fact they did reduce the one medium-term facility. going forward we think that will be targeted action by the pboc and the government in general. haidi: in terms of broader asia policy action, what more are we expecting? many say with the virus response

and the economic and monetary policy response, it is interesting most people are looking towards asia as the region which has gone first to see what successes and lessons are learned. what more do you think they will do around the region? >> we have seen the active quickly, swiftly and most asian central banks have reduced rates to new record lows. given the contraction we are expecting, we think they will continue to implement further rate cuts are you --. will -- they part of the reason why they can use this action, we think fiscal policy will take more center stage this year going forward. shery: how much will it help other asian economies where we are starting to see

stabilization, especially retail sales and factory output numbers we got last week? >> one sort of positive out of those numbers is they did indicate for torn -- return to normality. support.ng to be some it will be minimizing the supply disruptions we have been inspecting because of the goods china producers. now of course the rest of the world is under significant lockdown. you have got 50% of the economy on lockdown and that will weigh on chinese demand. consumer demand will not return to the strength we have seen anytime soon in china. we could see significant weakness on exports for asia. shery: one economy dependent on china, south korea. the consensus is first quarter

gdp will drop by the most since the 1990's. the asian financial crisis. bok to doprompt the more? >> they did do quite a lot of easing in march and have a 50 basis point cut and went and implemented qe. this is probably despite expectations for significant contraction in growth, easing some of the pressure of the bank of korea. we are still looking for a basis point cuts. i think they will be going beyond that, likely more reluctant. haidi: warehouse the bank of japan -- where does the bank of japan go from here? is there expectation the economic outlook is going to pick up at all?

we have seen the bank of japan stretched the limits of the policy creativity? we are looking for japan to shrink the 4.8%. inflation is mild given they had the consumption tax hike last year. we are not expecting significant action going forward with the bank of japan. back in march they said they will be buying more government bonds, etf's and the like. they have not raised purchase targets. this is more targeted. we are not looking for anything like further interest rate cuts, given it is negative. the senior asia economist. the cleveland -- two focused on limiting damage to financial markets and the economy to be

concerned its actions will encourage excessive risk taking by investors. while the fed is moving into unprecedented territory, it is trying to help companies impacted by the virus through no fault of their own. in a real unprecedented, incredibly deep shock to the economy. we could really use tools as best we can to get us through this pandemic shutdown, mitigating the negative impact on the economy so the recovery can be as best as it can be we get to that point. we are moving into unprecedented territory, but we are trying to -- impacted by the virus. we are going into it for example, corporate debt, which

we have not done before. we will include fallen angels that have investment grade rating before the virus hit. you are right, we are doing things we have not done before, but at this point i don't think we can be that concerned about the moral hazards. we have to look at, this is a hugely impactful and negatively impact shock. we have to do all we can to make sure we are not doing permanent damage to the underlying fundamentals of the economy so that when the time comes, we can get a decent recovery out of this. >> a lot of what you said makes sense to people. where we struggle, buying double be credits that were triple be might make sense to people. buying high-yield etf's that have triple c credit, exposed to a shaky energy sector, doesn't

make sense. [indiscernible] is two we are doing fuld. we are trying to make sure the markets stay functioning. some of the efforts the fed has done are really geared at margaret -- market functioning and some of them are geared to make sure we mitigate the negative effects on businesses and households and have credit flowing. i look at the etf part of that as market functioning issued. we are looking for gaps to make sure our markets are functioning. the efforts we have taken already have improved functioning in the markets. there is two things going on. one of them is to make sure we have markets that are well functioning so credit can flow

and do what it can to shore up the economy and prepare it for the recovery. we can disagree on the right way to do that, but part of what we are doing is to make sure we have unchaining financial markets because those are an essential agreement for the economy and any other policy we do can flow through. there is a transmission to the household and businesses that need those funding. know at this point the fed is all in to support the economy. when we get to the third quarter maybe reopening and it is time to stimulate the economy, is there more you need to do more can do? -- do or can do? >> we will have to see what it looks like when we get there. i think we acted appropriately

rapidly, in an unprecedented rapidly way because of recognition of how deep this shock was. engineered because investments in public health. when we get to that point, we will look at our tools, do what we can to support some of the programs the federal government is doing in terms of the paycheck protection program, and be prepared to use our tools as appropriate to make sure markets function and we are supporting the economy as we always do so we can get back to normal sustainable growth with full employment and price stability. that is why our goal is going to be -- we have tools to do that, forward guidance, interest rate tools we are doing now. we will move those things around

as appropriate to make sure the economy can recover and get back to a sustainable growth path. haidi: that was the cleveland fed president speaking to bloomberg television. haveg up next, we will more on the eco-outlook for the week with the goldman sachs chief asia economist. oxford economic is with us later on. this is bloomberg. ♪

shery: let's get a quick check of the latest business flash headlines. wynn resorts is calling for parts of the economy of las vegas to reopen. the ceo says they may have to stop if there is a spike in virus cases but the casino

industry needs to step forward before it is too late. they say they will reduce occupancy and physical distancing and temperature checks on all visitors. the aviation units the bank of china is going to buy 22 boeing airlines from united airlines. they will take six dreamliner's and some 739 max objects as the airline produces regular outgoing. deal will close before the end of the year but no details have been disclosed. mobile carriers in japan are delaying the launch of new iphones until may 11 as the coronavirus drags on consumer demand. others say the decision is driven by the governor;s nationwide state of emergency.

the state of emergency is expected to remain in place until may 6. haidi: let's take a look at markets trading in this part of the world. we have upside with kiwi stocks, up higher for a fifth straight session. the story is mixed. we will see downward pressure on oil that wti may contract, hovering around $18 a barrel. , iterms of emerging markets would be interesting to see the crude story weighing on that, given the msci index on the cusp of bull territory. u.s. is an outcry from the and threatening to antagonize protesters more. we speak with the former democratic party chairperson. we will have a number of major interviews later on bloomberg tv ,ncluding the philips ceo

societe generale -- don't miss those conversations. this is bloomberg. ♪

shery: -- this is daybreak: asia i'm corrina mitchell with the headlines. a dramatic u-turn, saying china may have elaborately released the infection. trump is now including the threat of punitive action. its investigation was that it was unleashed by choice. the president was praising the chinese geithner part for the way the outbreak had been handled. president trump: the question was asked, would you be angry at china? the answer would be yes, but was it a mistake that got out of control? or was it done deliberately? there's a big difference between those two. in either event, they should

have let us go in. corrina: indonesia is tightening virus restrictions. infection numbers rise. the new regulations will affect about 9 million more people as the virus continues to spread. indonesia recorded the biggest daily increase in cases since numbers were first reported, and the government why didn't restrictions to cities surrounding jakarta. asia -- aviation data shows a dramatic fall off in passenger traffic across the block. the graphic shows how lockdowns and the subsequent clash in den on amid the coronavirus pandemic. the leading airports are now handling as much as 90% fewer flights compared to one year ago. global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. i'm corrina mitchell. this is bloomberg. shery? ofry: a week and of rest

pro-democracy leaders is drawing sharp criticism. this after reaching asserted it's like -- right to intervene in local affairs. joining as now is emily lau. great to have you with us. first of all, just give us your reaction on the weekend's development. emily: it is, of course, very shocking and very disturbing. and as he rightly said, the chinese government is also insisting that they can interfere in the internal affairs of hong kong, which, of course, would spell the end of this policy of one country, two systems. and that is something they agree with the british when they signed the joint declaration in 1984. we are supposed to have separate for 50 years until two over seven. but it seems it is at stake in

hong kong people are very worried and, of course, the business community in hong kong, which includes people from all over the world, should also be concerned because if we are suddenly going to be reduced to just another chinese city or our freedoms, the personal safety, or the rule of law we have enjoyed for so many years will disappear. shery: has the virus outbreak in china and hong kong change the dynamic between hong kong and the mainland, given that hong kong really is suffering from this economic slump, will they give a chance for beijing to reassert itself? emily: i think so. i think beijing is thinking that because, not just china and hong kong, but the whole world, including the u.s. and many western countries and others, are fighting this virus pandemic. and so they will have no time to look at hong kong.

and some people think, beijing thinks this is a golden opportunity to assert total control over hong kong. but i can tell you, hong kong people are not going to where it. we are not going to allow our freedoms, our rule of law, our personal safety to be taken away from us so rudely. does it worry you in the sense that we're seeing beijing on the defensive? it's experiencing pretty widespread condemnation about its handling. some say the cover-up and subsequent inaccurate reporting, of the virus numbers as well. so, it's really, in some ways, come under threat when it comes to its position on the global stage. does that worry you in the sense that it could create a more aggressive beijing in terms of asserting its authority in places like hong kong? emily: well, of course it could.

but if it decides to do that, it would be very wrong. i think china should show the international community that it responsible as a transparent member, more accountable, and follow the behavior of responsible nations. if it can go anyway, but china wants to act in a barbaric way, i hope the international community will not allow them. haidi: domestically, what more administration, our government do to alleviate the lows of the economy, which have not just been out upon because of the pandemic related shutdown, but also 6, 7 months of protests and civil unrest. what other policies would you like to see, economically and

socially, to benefit hong kong right now? to see the, i want carrie lam administration listen to the views of many hong kong people and get engaged with the opposition in a dialogue rather than to just act as servant of beijing. because that's what she's doing now. virus thingwe want to be tackled, and then to reopen for christmas. there is problem with that. and the people in hong kong are very, very -- they follow the government restrictions and they stay home. and that's why we do not have that many confirmed cases. but once the virus is over, i can assure you the protesters will come out again. if the government does not listen to us and is not engage in dialogue with the masses. shery: if tensions continue

between the two sites, u.s. lawmakers are already causing -- calling on president trump to review hong kong special trading status. what happens if the special privileges are revoked? emily: of course that would be devastating, and some business people say if that happens, for hong kong, the game is over. and we don't want to see that happening. so that's why it's very important for the government here in hong kong, and in beijing, not to act in violation of human rights. otherwise the u.s. administration may invoke the act to ban these perpetrators of human rights violations from entering the u.s. and freeze their property and assets in the u.s. i think some of them are very scared about it. so, in order for that not to happen, they have to listen to the people and not to violate

their human rights, like they did yesterday or two days ago, arresting 15 pro-democracy activists. haidi: emily, what would you say to criticism that might come upon these pro-democracy activists and gatherings, that this is a time to show unity so that hong kong, along with the rest of the world, see to the other side of this global pandemic? emily: well actually, you are right. i think many hong kong people, including those from the pro-democracy movement, think that the top priority in hong kong now is to fight this virus, this pandemic. and suddenly, low and behold, the government mounted this big arrest, one day, arrested 15 very prominent pro-democracy activists. so they are not doing it. it's not us. many hong kong people say, they

stay home, they don't gather in big groups. even now, i don't think people should turn out and get it in big groups and get infected by the virus and be arrested. so, we have that priority. but the government doesn't care. ok, forget about fighting the pandemic. they just want to cause trouble and arrest all these activists. emily, i was pleasure having you with us. the former democratic party chair emily lau on the line with us. and we will have more on the outlook with hong kong with a chairman later on on daybreak asia. coming up next, we'll be discussing the outlook for commodities with jonathan barrett. this is bill burck. --this is bloomberg. ♪

shery: futures to the downside. sophie kamaruddin has the latest on the market. soph? sophie: this monday looking like i start -- sharp start to the week. nikkei futures in singapore opening lower. ? butwes lower this morning, a stronger than forecast

inflation data we got from the first quarter from new zealand. we possess more global data that will flesh out the virus impact, plus the reporting season is kicking off in earnest in asia this monday. china mobile emphasis are among the highlights. flipping the board in japan, more than 2000 companies are reporting through may. we're watching to see if more hold back on profit guidance, which could weigh on the recent stock recovery that could push the nikkei into bull market territory. in japan is signaling caution, with about 85% of new issuance this month coming from defensive sectors, a far cry to a lacked fiscal year and worries of recession in japan along with default. fourthly checking on oil, we are seeing crude extending declines after it last 20% amid concerns of storage capacity. check out the contract, flipping below $18 this morning, below

$70, probably the lowest since november ahead of the april 21 rollover, with the june contract trading over $24 for crude. we'll stick with markets. earnings hitting top gear in australia. some of the country's biggest players, including bhp and sent off. we are joined by john barrat. let me start with your views on oil as we are looking at that may contract potentially dropping to $17 a barrel. clearly, the opec deal hasn't done much at all. questionable how much the supply can actually do without an improvement in the demand outlook? jonathan: good morning. absolutely. i think when you look at the

opec-plus, the u.s. has certainly tried to control the market were rebalance the market and see prices higher. but when you're looking at the demand at about 30% and you're looking for opec-plus to control 20%, clearly there's a 10% differential and that's what is being factored in. if anything, there are certainly still prices that still remain around this lowering that you definitely need to see some form of confidence come back into the market in order to see prices stabilize higher. what are your expectations for earnings season? companies outside of metals and mining have withdrawn or withheld delayed guidance, and away, looking -- in a way, looking backwards. is it relevant to looking through to the other side of this crisis? jonathan: absolutely. and i think this is what we are

seeing with production reports, or will see. if you look at the recent rios report, that came in in terms of iron ore, when he looked at total production exports, still relatively robust. it didn't fall off a cliff. when you look at imports from china and iron ore, they weren't off a cliff. see there's still sensible demand for the commodities regardless. and what w'ere looking at is a u-shaped recovery for the shape and we a v- will provide that picture for sustainable prices in a lot of these commodities, which is what we have seen. shery:. interesting. so you're making the interest between demand and confidence. what are we seeing in the physical world in china so far when it comes to demand? are we seeing that pickup with factories starting to reopen? are, and the, we

word i see from a lot of colleagues who actually do that import export game is that china is open for business. whether it's from domestic demand side or whether it's 're seeing thee central authority is in china helped to support the economy. when you do look at some of the numbers, some of the economic numbers have been risky. but when you look at still production, that still reasonable given the circumstances we have been in and are going through. at the end of the day, i feel china has this ability to say we're going to continue to support this domestic economy. let's continue to buy. when we look at the imports of iron ore, as i mentioned, they're only off a little. so at the end of the day, that's reflected back and demand. for us, commodities in australia

and hence we are expecting to see at of south32 and bhp. china?what about outside rio tinto was saying demand outlook was uncertain for most raw materials outside of china. so if you have that weighing on prices, how will that balance itself out? jonathan: i guess that's one of the questions is how quickly can we recover when we are in this thorough of confidence trying to to the economies, getting back to work. that's why mentioned this recovery in confidence because when you go to the grassroots of the purchasing manager, he will look forward and say how confident am i that the economy will pick up? and when the confidence starts, they start to price that and it tangoe and we see

there's an end in sight. we are looking at the future, when we see that confidence, those curves flatten, we can all be optimistic the prices will reflect the same. a lot of the prices are not priced on cash contracts, but for contracts. out of the mining and metals names --haidi: out of the mines and metals names, who is best to rebound? it got to expect, at least partially, chinese policymakers will go back to the old playbook of increasing investment to try to get back on track. jonathan: look, i think when you look at the stability of most of our minors, the stability of bhp and reno, there are a lot of notes people are concerned about. but if you look forward in terms of the pricing for where these commodities are and you get the rate rebound with the resources

they are throwing it. you could see a situation where you do get a little bit more of the demand side feeling true. when i look at the mining sector, it's still the majors are big levels, the bhp's, the rios. 're stable investments. given the aussie where it is at these levels, exports are still there. these companies will reap the benefits. going forward, there's a great opportunity to buy. thank john barratt, you for joining us. we'll have more on the outlooks, ing bank joins us later. this is bloomberg. ♪

haidi: we have breaking news out of japan. we are getting the trade balance falling into deficit, with the adjusted number coming in at a deficit of ¥190 billion for the month of march, reversing a surplus in the month before, this as exports plunge, exports down 11.7% for the month of march. a bigger contraction than anticipated, and also the first double-digit contraction in the

15 months that we've seen exports fall. now imports also down 5%. it's a smaller decline for imports than was expected, but it's still a 10th contacted of month for contractions, as we continue to see this easing in the pickup of imports as supply chains in china went to business. but exports still under a lot of pressure on weak demand in the u.s. and europe, so you see import numbers eating estimates beatingg estimates. -- estimates. balance intoade deficit again for the first time since january. again, exports dropping for 16 consecutive sessions. let's bring in editor chris ansley. thedoes this play to

severity of japan's gdp contractions? certainly nott's a good sign for the momentum of trade going into the start of the second quarter. goldman sachs a few weeks ago penciled in a 25% contraction in japan's gdp in the second quarter. and these kinds of numbers would feed right into that sort of worst-case scenario. one thing that we should probably note is that import figure being a little less than of a decline -- a little less of a decline in forecast could also reflect that although japan has seen a pickup in coronavirus cases, there really hasn't been a wholesale economic lockdown in this country that we've seen in

many countries in europe and in many states in the united states, so that's perhaps a sign that domestic demand in the second quarter may not be that horrendous. we'll have to look at retail sales next week in terms of how they came in for march and what sort of momentum they had going into the second quarter. but it is notable that, just looking at stores across tokyo over the weekend, you know, many people are out and about. many people are still spending. so that's perhaps of one silver lining. but certainly the export picture, worst exports since mid-2016, and we're not going to see any sign of a turnaround for some time. --eah haidi: --haidi:

yeah, given that we do see external demand, does that mean we won't see rebound until the third quarter? chris: it's hard to see a rebound, you know, in japan's future, perhaps for some time. one of the notable features of the abe administration's stimulus package is a more than $2 billion initiative to bring production back on shore to japan. so it may be, in part, a recognition from policymakers that the export picture, the trade picture, is not going to improve for some time to come, and the important step now is to boost domestic production for domestic consumption. anstey with us in

tokyo with a look at the demand picture in japan. let's get a quick look at the headlines.ash the scent of the founder says the company hid about $800 million in futures trading, suggesting a much bigger hole in the company's plan. protections core friday following the drop in oil prices. the collapse means huge losses for banks, which lent him money. australian mile south32 is suspending its share buyback program as it recorded production for the fourth quarter. it's lowering capex guidance for the 2020 view to $500 million, including cutting its exploration target by up to $20 million. how marketsere's are trading at the moment. it's a bit of a mixed picture as we continue to see qe stocks

gaining ground, the pressure on u.s. futures, as well as asx and nikkei futures. rise.futures on the plenty more ahead on daybreak asia. this is bloomberg. ♪

♪ shery: good evening. i'm shery ahn. haidi: and i'm haidi stroud-watts. india's major markets have just opened for trade. welcome to daybreak asia. oiltop stories this hour, trading at in your two decade low as the curve is doing little further global glut. the virus continues to drag on demand. global infections keep rising, although there are signs of

easing in the west. president trump echoed a u-turn on china, asking if the infection was due to relief. a top oil trader, there might be a much bigger hole in the company's finances that he thought. shery: japan, south korea, australia coming online. let's turn to sophie kamaruddin for a check on the market. sophie: checking in on tokyo first years, classes for the nikkei by more than 1%, this after the benchmark entered a technical blow -- bull market last week. we are seeing the yen under showure, we had trading exports cell more than expected, marking a 16th straight year on year drop. jgb traders are waiting on supply details as the government considers a universal cash founder -- cash handout. let's check in on the open, the kospi off by about 4/10 of 1%. the korean won trading steady

against the greenback. clear sing momentum from the dollar with repatriation pressures looming large, along with soft eco-data to first quarter gdp on thursday. while the south korean government tries to return to a new normal, we are waiting on a job support package to be released this week, which comes after relief was announced sunday for the korean financial sector. let's check in on the open in sydney. clear sing stocks open, a little change after the asx cap again on friday, while the aussie dollar is holding a two-day event while the bond is trading steady. this after resolute and south32 provided traction updates. a hit to first-half earnings of which doesmillion, not include any estimates for higher loan provisions. switching out the board, we are seeing se be -- s&p slipping.

may delivery trading at a steep discount to later dated contracts, indicative of these storage concern. and lastly, let's flip the board for a snapshot on dollar market. we saw spreads tank the most in about a decade as privates might be looking. breakingt's turn to news on the bloomberg right now. we are hearing about financial leasing that they will be terminating their purchase and delivery of 29 737 max boeing jets, cvb leasing says it will offer certain economic maxessions that the 737 order will be converted to 737 max 8's. of 70l be leaving a total 737 max's on order.

terminating purchase and delivery of 29 737 max boeing jets. let's get a little more analysis on the markets. we're now joined by the head of asia equity strategy. frank, great to have you with us. clear sing investors turn more sanguine toward emerging markets. where you see opportunities right now? frank: yeah, so what we are seeing is the valuation of the emerging liquidities becoming more savable -- favorable, so it doesn't mean things are ok, but i think from a market point of view, from an asset location point of view, getting more exposure to asian growth, whether it is in a basement or whether it is and ensure china, whether it is some specific

sector, such as 5g, is something that we are currently recommending. also, i would say that in asia, what is important in asia for global markets is a company with a strong balance sheet. and here, it is quite interesting to consider japan and the japan dividend in a context where we are seeing in both europe, u.s., australia, morse -- more dividend and shall buyback. shery: we continue to see some numbers out of china that, although they don't look great, they are showing signs of stabilization starting to take hold. will those be reflective in chinese earnings? well, what we can see for

earnings, globally, is going to be an outright contraction 20-25%. far, it has been quite resilient. i think, on a relative term, but we are going to see this year in china, probably 2021, is earnings to be more resolute. it doesn't mean the kind of growth that consensus is expecting in the month, which low, but i think it will be possible to have growth and earnings on ensure markets. shore me markets. -- on arkets. haidi: how quickly do expect

chinese rebounds and bounceback will be? and if we see stability in the u.n. and -- yuan and risk overall, do see that lending to assets in asia? assets, think all the which are going to be linked to china investments, which are going to be linked to china expenditure spending are going to benefit. asia, there iso probably some divide between the north and the south, and south asia market is very sensitive to consumption to be and these are- the ones that have been suffered first, which in my opinion, are going to continue to underperform. when we look at the growth in

some, there is certainly shock on global demand and some shock on -- that at the same time, we are seeing some ambitious infrastructure spending. the -- isobably where -- problem is going to lie, primarily china. and then on the part of asia, and i think the northern part of asia, are going to be the main beneficiary. valuations on tech still make it an attractive prospect, particularly as you, among others, will say we outperform, weathering the recent selloff he will? -- pretty well? frank: well, when it comes to tech, is very broad sector -- it's a very broad sector. the harbor sector, semiconductor

sector, at the end of last year had reached a pretty high level of valuation. was discounting already strong growth of 5g being expected to deploy. and then we had some major correction, which is today, making the valuation more affordable for a certain number of names. that theurse, we know market is going to slow down this year. there is definitely an impact of the covid-19, but how much slowdown and what kind of -- we can see, that is going to be stories for the second half of the year. and i think they could be one of the good stories of markets. shery: and you mentioned earlier, japanese dividends, we are getting numbers out of japan later this week.

how big of a risk does that economy and the markets face when it comes to potential deflationary shock? potential for the sharp is not only in japan, it is everywhere because what we are seeing in the first quarter of the year is first and foremost global demand shock. so, as it is impacted everywhere, including japan. so the risk of deflation coming is one of the reasons we are highlighting in our investment scenario, including japan. when iting said that, comes to equity investing, when it comes to income investing, there are some place which appeared to be safer than other. one of the legacy in japan of 20

deflation iss of the company has been hoarding cash. this has been the case since 2014. as a result, we are seeing now the company in japan, which have one of the highest levels of cash, comparative market and assets and any market in the world. it doesn't mean the market is going to do very well, but it means the ability to pay dividends is going to be higher than what we can see in other countries and in other markets. frank, thank you for joining us. let's take a look at some of the movers in this early part of the trading session in australia. we are seeing this off half a percent at the moment. one of the biggest decliners off by almost 7.5%. dropping, this company

a bid on a follow-up from the pandemic in the virus and all the economic uncertainty caused by covid-19. looking away from that proposal to buy the oil refiner and retailer, and of course we still have the plunge in oil prices on oil, as well. south32 at with guidance and production today, but the major headlines saying it's going to cut controllable costs across businesses affected by the covid-19 response, lowering guidance for a number of operations.

finally, we're watching nab saying it will take a $1.14 billion australian against first half earnings, the second of big lenders to warn shareholders of tough times ahead. lots more to come. we're taking a look at hong kong, have the city is faring better than others when it comes to dealing with the virus pandemic. and in other areas, it is faring far worse. we talk to the hong kong general chamber of commerce peter church us. and coming up next, deutsche bank with us to discuss china's loan prime rate and the country's economic outlook. this is bloomberg. ♪

shery: europe -- corrina: you're watching daybreak asia. i'm corrina mitchell. a dramatic u-turn on the coronavirus, saying china may have deliberately released the infection. trump is now including the threat of punitive action. its investigation was that it was unleashed by choice. the president was earlier praising its chinese counterpart for the way the outbreak had been handled. president trump: the question was asked, would you be angry at

china? well, the answer might very well be a resounding yes, but the question is was it a mistake that got out of control? or was it done deliberately? ok, there's a big difference between those two. in either event, they should have let us go in. corrina: in india, virus cases have surged, taking the total above 16,000 as the nationwide lockdown enters a fourth week. confirmed cases have been rising as it steps up tempting with -- testing with known infection stepping up last week. dr. say the true number is far higher, with only 370,000 of india's 1.3 billion people tested so far. meanwhile, western europe is reporting a decline in pandemic cases, with the fewest deaths in weeks. fatalities in spain rose by 410 to just over 20,000, the smallest decline since march. italy reported its fewest deaths

in a week, and france that deaths rose at the slowest pace in the last month. data from germany and u.k. show and prevent. global news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2,700 journalists and analysts in more than 120 countries. i'm corrina mitchell. this is bloomberg. haidi? the pboc will announce its latest settings for the loan primary, tweeting they are widely expecting a cut. isning us now from hong kong lena. great to have you. the messaging has been steady from the pboc and from state media, so no surprise if we do get that lowering today? guest: thank you. cut,i agree following that some facility to 2.95% last week, we expect april rates to

fall. we call for one year fixed income rate to fall by 20 basis points to 2.85% and five-year points.fall 10-15 basis of monetaryerms policy, the central bank -- yeah, go ahead? haidi: no, i'm sorry, continue, continue. linan: indeed, our monetary policy has been relaxing monetary policy conditions. for example, china has cut the ratio three times so far this -- january, march march, and april, with 1.70 5ive injection of trillion remit be. china has also cut open market interest rates in one year and

now by 30 basis points year to date, also cut interest by seven basis points buys 0.35% we do see room for monetary policy to be relaxed further, rest of this year, we see liquidity provision through rate -- cuts so there is liquidity for facilities. we also see another 20 basis point cut in one year rate for the remainder of this year. it's also possible for a potential 25 basis point cut in inflationecause if normalizes below 3% later this year. the rollback of containment measures has already happened. the economy is already back. they question mark over chinese consumers.

but we know the government shifted into jim -- demand stimulus mode and chinese policymakers probably more than others have more ammunition in their toolbox and more flux ability in what they can do to throw at the economy to get it back on track. let does all of that matter when external demand is likely to remain week? -- weak? is that going to be the critical missing puzzle piece here? linan: indeed, that is a very good question. we are also worried about how sustainable the growth recovery is going to be for especially q2, given the virus condition in the rest of the world. but q1 growth, if you look at the sequential growth in march, there have been very strong rebound in industrial production , as well as investment activity

. the consumption and service sector remain quite weak. so, we are still projecting gdp remain negative. after the six way percent gdp growth contraction in q1. , -- 2.5%t at two by 5% in q2 in q2, we expect growth to rebound to positive, at two by 2.5% toree-putt 5% -- three-putt 5%. shery: what does that mean for the chinese yuan, because this really remains rather resilient? just really quickly if you can. linan: we are expecting remit be exchange rates between 680 to 710 in the near term. it's very clear, given global

growth uncertainty and pricing volatilities, the exchange rate is likely to be quite volatile in 2020. but i think there are a couple factors that continue to be supportive. we know the dollar strength in the past couple weeks has been primarily attributable to dollar liquidity stress and recently, dollar liquidity has improved and secondly, if you look at china u.s. interest rate short-terml, both supportederm, that is to the exchange rate, as well. lastly, china opening financial market and continue to attract capital inflows is supportive to currency to in the year at 680.

shery: thank you very much. plenty more to come on daybreak asia. this is bloomberg. ♪

shery: talks between the u.k. and europe resume monday via videoconference as they tried to meet a post-brexit trade deal in the shadow of the coronavirus pandemic. e leaders will host their own summit later this week. let's get more with jody shiner. let's start with the meeting. what are we expecting? so this is going to be a virtual summit as they are on thursday, and one of the main topics will be how to aid economies that have been hurt, in some cases almost devastated by the virus. and we're already hearing there theoing to be some clashes,

italian prime minister expected to renew his call for joint euro area bonds to aid economies like is. his.here's -- like and there's some countries who don't want to go this route. the preferred route for germany is not this. they don't want to see this and they have a lot of sway. that will be one of the big topics that we expect. another is what happens as these countries try to ease their lockdown? what does that mean for other countries continuing lockdown, and what about borders? these are going to be the things that we expect in the discussion. you're sayinghat is talk about lifting restrictions. what has been the uk's official response? u.k.,yeah, so in the there have been reports a

lockdown could be lifted in ,everal weeks, and officials including the one helping lead the government as boris johnson recovers from the virus. he says absolutely not and he told the bbc that this is not true, they can't have a date for when this will occur. these are the conversations going on around the world, including the u.s. but in the u.k., number of cases are still going up and they are having a problem with protective equipment for hospital workers. so this has been an issue there and other government ministers are trying very hard to really quell the discussion of opening up but they just don't see that yet. jodi schneider with the latest. we will have interviews later today, including the coo of

phillips, iht's ceo, and larry kudlow's economic advisor will be with us. this is bloomberg. ♪

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>> a mixed picture in early trading across asia. let us turn to sophie for more. we are seeing the nikkei 225 lose ground by as much as 1.2% after the benchmark entered a bull market last week. now paring losses from a march low. the kospi reverses earlier losses, adding 0.3%, set to extend five days gain. we are seeing that stock rally in sydney under jeopardy after a major lender flags a hit to earnings. the deal has after

been dropped, that was a $5.6 billion bid that has been dropped. let's check what's going on with treasuries. looking steady this morning. the dollar just hedging higher. the risk barometer, the aussie-yen under pressure, losing momentum after failing to push through last month's breakdown point. gold falling for a second straight day. hedge fund managers have boosted to a three week high amid this controversy around the coronavirus. crude for may delivery now off by more than 8%, trading at the lowest level since november 2001. we are seeing the contract at a steep discount to later dated contracts. >> let us get more on the coronavirus pandemic. global virus cases near 2.4 million.

the world health organization says social distancing restrictions imposed to curb the virus must be eased in phases and do not spell the end of the pandemic. yvonne man joins us. let us take a look at countries in asia that are starting to relax social distancing measures. what impact are we seeing? isnne: in south korea, it one of those examples. they saw the fewest number of new cases since the start of the surge, only eight in a 24 hour period. the lowest since this outbreak began in the country. we saw thousands of infections per day. they will keep most social distancing measures in place until the fifth of may. they will start to ease some restrictions like church services, for example. the government also thinking about reopening schools. they are quite cautious. matic is a fear of asympto

cases that could continue to spread. getting daily numbers in single digits, certainly a milestone. a country that did not have a lockdown or and travel. it has become a good model for the rest of the world. haidi: we are still seeing hotspots, right? particularly in india. most recently, singapore. yvonne: india has been interesting. they reported the biggest daily increase in virus cases, adding 1500 new infections to now more than 16,000 cases in the country. this as the nationwide lockdown enters a fourth week. we have seen virus cases surging nearly 80% from a week ago as the country expands testing. you talk to the infectious disease experts out there, they say the numbers are likely to be much higher. -- not veryot much accessible to the public.

1.3 billion citizens in india, only 300,000 or so are being tested so far. that is three hundredths of a percent. prime minister narendra modi extending the lockdown until may 3, but has allowed makers of i.t. hardware, farmers, and rural industry to resume operation starting today. singapore reported another 596 new cases sunday. dorms, a rising trend in the city space. indonesia as well extending stricter social distancing rules in the main island of java. 9 million people. the number of infections now totals more than 6200 in the country itself. back to you. latestlet's get you the coronavirus cases out of china. breaking right now, china

reporting 12 additional coronavirus cases on april 19. we have more than 2 million cases globally. deaths exceeding 154,000. china is saying eight out of 12 new cases have been imported. eight out of 12 new cases in china being imported on april 19. we will talk to the company that has created a new virus test kit that might help plug the hole in testing around the world. we will be joined by the ceo and founder in two hours. next, we will talk to the hong kong general chamber of commerce , peter church house. we will be discussing the virus and political tensions affecting the economy in china.

haidi: this is "daybreak asia." indonesia's tightening virus restrictions, extending curbs on millions of people as infection numbers rise. new regulations will affect 9 million more people as the virus continues to spread. indonesia has recorded the biggest daily increase in cases since numbers were first reported and the government has widened restrictions to cities surrounding jakarta.

meanwhile, calling on the international monetary resist american pressure to alleviate the coronavirus impact. for $5 billion to shore up an economy battered by u.s. sanctions and falling oil prices. washington has said it will block the application. the imf regional directors as the request is proceeding. base shows aon data falloff in travelers across the block. the collapse in demand has slashed flights. the bloc's leading airports are having 90% fewer flights compared to one year ago. global news, 24 hours a day, on air and at quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. : china is taking steps to reign and the democracy movement

in hong kong, drawing sharp criticism from the u.s. and others. joining us now is peter churchhouse. thank you very much for joining us today. we are not even out of the woods in terms of handling the coronavirus outbreak in hong kong. already we are seeing tensions flare up again between hong kong and beijing. how much more pain will this bring to the city's economy? economy is very lucky compared to many other economies around the world. biggovernment has a very pile of reserves, which it can hello? are gettingorry, we some interference, but do not mind what you are hearing. focus on my question of pain for the hong kong economy, if you

could. peter: in some ways, hong kong is luckier than many other countries in so far as it has a deep pile of reserves that can be applied to the economy. the government has virtually no debt. companies in hong kong are not highly leveraged. households in hong kong also do not carry a lot of debt in terms of credit cards, higher purchase, so on. the banks are in good shape. in that respect, hong kong is pretty lucky. i think hong kong can expect what i would call a profit loss account problem more than a balance sheet problem. whereas in a lot of countries there is going to be a severe systemic balance sheet problem, hong kong is not going to be in that position. they will definitely see a big pullback in earnings and profitability across the board in hong kong generally. shery: tell us a little bit what we can expect for normal hong

kong citizens. we are expecting hong kong jobless numbers out today. we are expecting a six month of increase. how bad could it get for households? peter: put it this way. the official numbers front implement in hong kong have risen from 2.8% to 3.7%. suspectw, but we all those figures do not actually give us the true picture. we have got something like 10% of the workforce in hong kong, or 10% of the population, works in what you might call the gig economy. casual employment, self-employed, so on. gete people i do not think picked up in employment numbers. i think the figures are probably somewhat worse than the official numbers would suggest. i can think those official numbers are going to go from 3.5% right now to something around 5% or 6% over the next

couple of months. i think we can expect to see it get worse before it gets better. you talked about the positive points, where hong kong is handling things better than others. the handling of the virus, they debt of most companies. is the bigger problem for hong kong that longer-term existential question as to what happens after we have the pro-democracy versus sawblishment issue, as we over the weekend with the arrest, still very much the key issue. certainly the social unrest last year in the second half of the year took a big toll on the economy. we have seen for 13 months now retail sales declining consistently. in february they were down 44%.

we are also seeing significant drop off in tourism, a big part of the local economy. visitor arrivals are down more than 95% as we speak right now. that is playing a big role. the collapse in visitors and tourism from across the border and around the world is going to have a continued impact on -- particularly on the hotel industry, food and beverage, and the retail sector. that is playing through into office prices, office rents, regional rents, so on. new business registrations are down 20%. medium-termng problems that have been around for about a year, now exacerbated by the coronavirus. shery: does that tension with

the mainland minimize the amount of upside benefit hong kong is likely to get from a china recovery? peter: think about the hong kong a want on the china economy. the hong kong economy is highly dependent on trade, on capital flows, and highly dependent on the china economy. everybody is expecting the china economy will rebound in the second half of this year, and i think the consensus figures are that the economy will grow by 1% to 2% on a year on year basis for 2020. most of the rest of the world is going to be negative. in that respect, hong kong will benefit from any recovery we see fragile. albeit hong kong is well-positioned to benefit from that expected recovery. i think in some respects, hong

kong could see itself as fortunate. shery: u.s. lawmakers calling on the president to review hong kong's special trading status. are you concerned about this? peter: not particularly. i do not really think it is going to be a big issue. is going to continue to be a trading hub for china. it is going to continue to be where chinal center companies raise capital on the international markets. i think those functions will continue. they exist outside of politics in a way. hong kong still exists and will continue to exist as a capital-raising center for china where many companies raise capital both in the equity markets and that markets -- debt

markets through hong kong. the biggest source of foreign capital for china is still through hong kong to a very large extent. shery: but for how long? we have seen beijing's efforts to continue to open the financial markets in china. will hong kong's importance continue to decrease, especially after the coronavirus outbreak and of course the ongoing political tension? peter: that is correct. we are certainly seeing shanghai trying to open up its debt and equity market. the big issue that i think will limit the way in which that can happen in china is that china still has extensive capital controls. will inhibit the way in which china's own capital markets will evolve. certainly in the domestic market, we are going to see a big expansion of local debt markets and trading within the

existing framework within china. most of the stock market in china is dominated by retail investors. the institutional investment seems very young. that is going to grow substantially in china. also, we are going to see that institutional investment flows had offshore as well -- head officer as well. -- offshore as well. places like singapore will benefit. shery: in places where the wealth and poverty gap is extreme, how much concern is there when it comes to the welfare safety net as we see unemployment become such an issue? peter: that is a very big issue in hong kong. say the wealth gap in hong kong is one of the highest in the world.

it's health care coefficient is one of the worst in the world. aere is not a world of -- well-developed social safety net in terms of an employment. on the housing front, something like 50% of the total population lives in government-subsidized housing of one form or another. in some respects, there is some kind of social net. when it comes to unemployment, education, and that kind of thing, hong kong is much less well-equipped than many other developed societies. for example, around the pacific rim and the u.k., europe and the u.s.. is hong kong in real danger of losing its position as being the gateway to asia, the premier financial and commercial center of asia? or has it already lost that given what we have seen in the

last eight months? peter: there is always that risk. singapore has been developing its own financial services center very strongly and very well. they have developed certain aspects of the financial services industry which perhaps hong kong has lagged behind in. for example, in financial technology, the establishment of real estate investment trusts. frompore has moved ahead other cities in the region. however, hong kong still is the second or third biggest source of capital raising as a stock market in the world. that oscillates backwards and forwards between london, new york, and hong kong. that role has not diminished fundamentally over the last couple of years. mightears, some months it be london, it may be new york.

hong kong is up there in the top three or four in the world. it is the third or fourth biggest stock market in the world. i think it is still up there, but you are absolutely correct. there is always competitive voices operating somewhere that can undermine and take business elsewhere. hong kong does have to watch out for -- watch its back on these fronts. shery: always a pleasure to have you with us. you can get a roundup of the stories you need to know in today's edition of "daybreak." bloomberg subscribers can get on your terminals. settings soomize you just get the news on the industries and assets you care about. ♪

shery: we have breaking news on the bloomberg. the u.s. treasury department is temporarily postponing tariff payments for 90 days coming as a proposal was pushed by some businesses to delay payment of certain tariffs by three months. the order does not apply to chinese goods or duties on metals.

the u.s. action does not apply to countervailing duties. they don't apply to section 201, 232, and trade remedies, the tariffs president trump as a result -- imposed as a result of enforcement action such as on chinese goods or steel and aluminum from around the world. pushed, thesinesses u.s. treasury postponing certain tariffs payments for 90 days. the founder of a top singapore oil traders as the company hit 8 billion u.s. dollars in losses in futures trading, suggesting a bigger hole is in the company's finances than first thought. curiouser,s are and what do we know? haslinda:: it shows how quickly

things are spiraling. of the talk about one largest suppliers of ship fuel in asia, it called for protection on friday. they say it owes more than 20 bakers -- bankers. affiliates, ocean tankers also filed for protection. hsbc is among the lenders. hsbc had talked about shoring up its finances. some of the banks pulled out their credit line on concerns the company will not be able to pay its debt. includeith exposure standard chartered, deutsche bank, it is a story not looking pretty. shery: what does this mean for singapore? haslinda: it is not good news.

it is rocking the oil markets in singapore. this is one of the most important oil markets in the world. over the last three years, singapore has seen the collapse of two other big names in the industry. one imploded. business.just the oil it is also the banks. bankers increasingly reluctant to give the credit lines needed to survive. company can keep out of the market, bankers will find it crippling. singapore is not the only one of concern. you have to look at london, geneva. they should be watching as well. shery: thank you. let us now get a check of the business flash headlines.

a canadian company walking away from a $5.6 billion deal because of the economic uncertainty caused by the coronavirus. talks began late last year with an initial offer being lifted by $130 million. the company says it plans to reengage ones there is clarity in the market and says it still sees it as a good strategic fit. australian -- buybacks for the fourth quarter, lowering guidance for the 2020 financial year to $500 million, including cutting its field exploration target by $20 million. south32 reported lower production of coal, silver, and led, while zinc and nickel output increased. let us take a look at markets. pretty mixed up when it comes to

the state of asian markets. japanese markets to the downside by 0.6%. lows, but off session still off by 0.1%. market coverage continues. ♪

>> beijing, shanghai, and singapore. welcome to "bloomberg markets china open." >> we are counting you down to the start of the trading day in hong kong and the chinese mainland. a look at top stories. president trump turning on china. the question of whether coronavirus was deliberately released. two months ago the president was praising his counterpart in beijing. >> oil extends its slide, near