shery: good evening. i am shery ahn in new york alongside haidi stroud-watts in sydney. we are counting down to market opens. welcome to "daybreak asia." our top stories this hour, asian stocks look set for gains after wall street hit a six-week i. the s&p 500 rising to its best close since march 10 on easing lockdowns. crude fell after the biggest oil etf says it is offloading

here as well. looking at continental europe, spain and france are two countries the hardest hit by the coronavirus along with italy. they are set to ease lockdowns. we have pedro sanchez expecting to announce the loosening of measures after the weekly cabinet meeting which takes place later today. later today also, france will be presenting the government's blueprint to the national assembly on tuesday afternoon, and that should outline how they plan to ease people's confinement as well. is the original epicenter of the outbreak on the continent that will soon allow people to leave their homes for the first time in weeks, and that should mean they will be joining other countries including the likes of germany and austria in relaxing of shops to array

open up including tattoo studios. in the u.k., boris johnson saying the british public should keep on obeying lockdown rules to avoid a disasters second wave of this outbreak here as well, coming as the number of recorded deaths from coronavirus in hospitals fell to 360, the lowest daily figure since arch 28th. in this region, japan weighing they need to extend the state of emergency there. and balance that with a fall in new covid-19 cases with fears that easing restrictions too soon might lead to the very explosion in the infections that authorities had sought to avoid so that is what we have an philippines also may soon start to ease some of the lockdowns they had in place since the middle of march. we have the president saying the two month lockdown will only be modified as they actually weigh up what happens in terms of if they lift it totally, and what

that does to new infections. guys. shery: lots of concerns about that second wave of infections, right? what sort of warnings are we getting about potentially another bout of new cases? rishaad: the world health organization is concerned about the rising number of cases in latin america, africa, and some asian countries, as well as also eastern europe. what we have of course is the winter coming to the southern hemisphere. shot now and also beware of this also bringing up -- virus in the southern hemisphere as well and saying, at the moment, this is the director general, saying that pandemic is far from over and the countries should do all they can to avoid a second wave, put in the right policies now, and also be vigilant as they try to ease lockdowns as well. who very worried that this could reemerge in the southern hemisphere, and then later on

this year, find a second or third wave in certain countries to find themselves in the northern hemisphere as well during the autumn and perhaps into the winter as well. rishaad salamat up in hong kong. thank you very much for that. still ahead on "daybreak asia," the latest indication on the impact of the virus and japan's economy when it releases jobs data. we will analyze those figures. haidi: up next, global investment victoria fernandez is our guest as investors look ahead to the feds policy decision. this is bloomberg. ♪

karina: you are watching "daybreak asia." i am karina mitchell with the first word headlines. japan is adding 14 more countries to its entry ban list as coronavirus cases rise. the affected nations include

russia and saudi arabia and people who have been in any of them for two weeks for heading to japan will not be allowed in. the government had already banned 70 countries from entry. tokyo tries to stem the fallout from the infections. japan has more than 13,000 virus cases and 364 fatalities. in other virus developments in asia, the indian government may guarantee almost $40 billion of loans to small businesses and made plans to reopen the economy after a 40 day lockdown. indonesia to allocate $1.5 billion to help people left without a job by the virus. in the philippines says it may soon ease virus restrictions that have been in place since the middle of march. new zealand is entering the post lockdown world, reporting five new coronavirus cases with some of the world's most stringent restrictions. the government says there have been no new community transmissions and the worst scenario seems to have been avoided. some businesses are being allowed to reopen but the

government warns social distancing will stay for the foreseeable future. it is not and cannot be a return to pre-covid-19 life. that day will come but it is not here yet. to get there, our team needs to have zero tolerance for cases to complete our goal of eliminating the virus. karina: 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 karina mitchell. this is bloomberg. the fed holds its latest policy meeting on wednesday in an environment of economic crisis and soaring unemployment. officials will have to decide whether to take the unprecedented move of bringing negative policy rates to america's shores. we will be discussing the fed policy decision, not to mention the other central-bank decisions this week, including the boj's

broadly in line with estimate decision that came out on monday, just increasing asset purchases, not to mention ecb's central-bank policy decision as well. right. let's get a quick check on how markets are trading at the moment. we are seeing pressure for u.s. futures, not to mention japanese futures, this after japanese markets rose to a six week high. we had financials leading the gains. surprisingly positive data coming out of deutsche bank when it comes to japan, as i mentioned, we have the boj policy decision oddly in line with estimates. stepping up their stimulus on monday and buying as many government bonds as needed according to the boj. we will be discussing this and much more after the break. this is bloomberg. ♪

shery: the coronavirus pandemic has shaken the world with potentially profound effects on geopolitics. eurasia group founder and president takes a look at president xi's mishandling of the outbreak and domestic polarization in china. internally, the fact that xi jinping did cover this out for the first month caused enormous opposition to him domestically that they needed to battle. this was by far the biggest crisis he has faced, just like other leaders around the world, and of course, since then, their economy is restarting and there was tremendous quarantine, a lot of pride around that, but there was still a lot of domestic opposition on top of that. internationally, the chinese are the economy that is restarted and that is good for supply chains for them, but they are also increasingly having angers

pointed at them, especially by the united states and if it turns out the united states and china are in a cold war on the back of xi jinping's mishandling of this, again, a big crisis. you know, i see a lot of media around the world that says china's economy is in best shape coming out of this given the state of authoritarian capitalism and surveillance. all true. we could -- should recognize xi jinping is in a more difficult position now than any point since he started meeting and leaders i have been talking to increasingly question whether it is clear that he would get a a lot ofm in 2022 so domestic polarization in china right now. >> that's fascinating. i thought he was president for life. do you think that is in question? does that make him work dangerous -- make him more dangerous? : certainly, when he

declared himself this core leader and ended the term limits in china, that was a very big change from the way we thought about this group of faceless lead bureaucrats that always ruled by consensus, moving from that to a more russia style authoritarian leadership. well, there's a lot of backlash, and again, the scale of this crisis is pretty big. i don't think the story has been written yet. knows that jinping he has not handled this well on a bunch of france. you remember the initial whistleblower, the one that was punished and eventually caught the coronavirus and died. the chinese government eventually apologized for having mistreated him and is now considering him a hero. you never see the chinese leadership do something like that. that happened on xi jinping's

watch. there has been a lot of that over the last few months and i think the point is that as much as it seems from the west that china is stronger now than they have been historically, let's keep in mind this is also a really bad reception for china. the economy will be harder to manage, harder to keep everyone in full employment, harder to get supply and demand back to where it was. that is a problem for xi jinping, that he never thought he was going to have coming into this year and there are a lot of people inside the country, leaders in the country that feel like his style of leadership has actually made china internationally and domestically more vulnerable. >> lets go across the border as it were to north korea. what is your take on what is going on there? we have not heard anything out of there for a a while. strange that there are always rumors about kim jong-un and they have not done anything like to show him to us to dispel the

rumors. it is completely unusual. we have had two weeks before he's been seen. there's all sorts of speculation that he is dead. no useful on the ground intelligence. if he was fine, they would be saying something, so at the very least, i think this is a major theth scare and we saw chinese doctors network sent over the weekend to provide support and we obviously get some intelligence for the chinese government. the point is that if it turns out that kim jong-un is no more, there's no obvious and easy succession plan and what we are all talking about, his sister, but the idea of a woman running of anathema tod north korean society and governments -- governance. the idea that somebody not in kim jong-un's family is also inconceivable given the

mythology around how leadership has come directly from the heavens and has been bequeathed through hereditary succession. and, youittle dicey know, if it turned out that there was in any way a fight with a 25 overpower ands nukes significant military capacity and the balance, we would see chinese intervention to ensure it did not break down. that was ian bremmer. now awaiting central-bank decisions from the federal reserve and the european. a lot of pressure on global central banks to do more. joining us as the global investments chief market strategist, victoria fernandez. there's a lot of pressure for central banks to do more.

a lot of pressure on policymakers. it's costing governments in the world to do more. will all this stimulus effort actually help global economy for avoiding that dreaded w shaped recovery? helpam not sure if it will avoid it. what i think it is going to do is allow the economy to come back a little bit quicker then maybe it otherwise would. anticipationot of we would have that recovery for a while. concern on the speed that people will come back. with that in mind, i think central banks are trying to find a way to help things happen more quickly but i don't think it is going to diminish the severity of what we are seeing at this point in time as far as corporations are concerned. >> definitely put a floor in on the markets.

with their facilities they put in place. we saw the bank of japan put a floor in with their bond buying and i anticipate we will hear from the ecb this week. when -- we are in earnings season but really difficult right now given the uncertainty globally of what to watch out for in these analyst calls. what will you be waiting to hear? typically, we would be looking at expectations for the quarter. what does that tell us about the coming quarter and their projections coming forward? because of the economic shutdown, it is difficult to take these numbers from the first quarter even the numbers we will get from the second quarter and extrapolate that out for the rest of the year in the beginning of 2021. it is a very difficult situation.

we have seen all of the companies pulling guidance right now, saying they don't have the ability to give back what they think will happen going forward so you have to take a step back and even though we should be looking at fundamentals every earnings season, i think taking a look at the balance sheets this quarter is going to be one of the most important things we should do. like?oes cash flow look do they have themselves in a position where they can have the global economy, out of an economic shutdown and go to the other side? that will be the key for companies going forward. that was the global investments chief market strategist. staying withandez us. asset managers are grappling with the impacts of the virus pandemic. funds face big changes and challenges to their business continuity plans and major market volatilities.

douglas flint is warning managers should expect their capital to perform worse than expected in the foreseeable future. earlier, he told us who he thinks stands to lose the most. >> it is clearly very difficult. those who are suffering most include those who are retired. their pool to add to of savings. it is now are remunerated in them much more than it used to be, whether it's interest rates are virtually nothing on savings accounts or dividends, which has been significantly curtailed in the current crisis. areng said that, businesses in difficulty in terms of their cash flow and their funding. they have no choice but to cut their dividend. companies that are seeking support from the public press cannot, in my view, in any degree of credibility, pay money out to shareholders while seeking public support so i

think for those companies that can pay a dividend, and we were very fortunate, very pleased, and it says something about resilience but we were pleased we were able to recommend to shareholders that we do pay our final dividend because we have the financial strength to do so. i think companies that have the strength to do so showed and those that put their business model and therefore the jobs of their colleagues at risk should not pay dividends. they should make their balance sheet more resilient and they should prepare to resume dividends once they have got the business model in the new world post covid operating successfully again. lessons learned. part of theafraid, consequence of this crisis that those who relied upon their capital performing in the way

that they expected are going to be disappointed that it will be less than they hoped for in the short-term, but hopefully, the measures that are taken by government, central banks, and the companies themselves, means that in the long term, it will be a better position for those who have their capital invested in the markets. pensions, insurance products, and their savings. >> what does this mean for consolidation in the asset management this year? does it accelerate the movement ? >> things will be on hold until there is a greater clarity in what is going to happen after in terms oflt with moving to the next stage. i mean, it would not be possible at this stage to do due diligence. the business model and revenue and cost model going forward. i am sure that when this is over across all businesses, but certainly in our sector, people

will look at the benefits of diversification having a greater geographic distributional, having greater scale to be able to absorb the cost space in a lower revenue model if markets stay at levels lower than they were before we went into this. then yes, i am sure there will be some consolidation that takes place in order to adjust business models but i think we are well ahead of that being possible to do or even to be contemplated. our responsibility in the moment workforce,sure our our well looked after -- that we are agile in the way we we deal with them and also respecting the fact that many people's family circumstances will be very different depending on what their partners are doing and whether they have children at home and whether they have parents that they are going to look after so we have to be very thoughtful about managing our

colleagues at the moment. standard life aberdeen chairman, douglas flint. let's get you a quick check up on how markets are trading at the moment. we are seeing futures pretty much flat at the moment. u.s. futures paring back earlier declines while japanese futures also paring back those declines. we are seeing the japanese yen hold pretty steady this past few severalaround the 100 level. not surprising when it comes to boj action, promising to buy as many government bonds as needed and more than doubling their buying of corporate data. when it comes to kiwi stocks, at the highest level in over a week. they are back from a public holiday. we are now seeing aussie futures also trading at around this seen theer we had aussie dollar outperforming all of their g10 peers. we are seeing easing of some restrictions on coronavirus in

two states. plenty more to come. this is bloomberg. ♪

shery: we are just getting some breaking news on the japanese labor market. the job to applicant ratio for the month of march, we were expecting 1.4%. pretty much bang on expectations. 1.39% is what we got and a bit of a drop from the 1.45 that we were expecting or that we had in the month of february. the jobless rate, we are still waiting on that to come through. surveyed expectations among economists and we spoke to is for a leveled hold at around 2.5%. a slight tick up. that has not come through yet. while we wait for that headline number, let's bring in is you me

-- izumi. great to have you. as we wait for that headline unemployment rate to come through, what do you make of the bank of japan's removal of those limits on bond buying? at this stage, is it kind of procedural in terms that we know that they will really go to the extremes of what is really an extreme level of monetary policy? and will they be getting the impact that they are looking for? were to compare what the bank of japan has done -- the hyperactive set, there is a tendency to be underwhelmed. if you look at the details of their decision yesterday, a lot of the stocks, as aggressive as it sounds, are a continuation or expansion of measures that they already had in place. for example, tripling the upper limit of their commercial paper and corporate bond purchases, expanding the lending program,

and of course, the commitment to buy unlimited jgb's. if you look at that, they have done all that, including the fact that they always have the capability of stepping up their bond purchases as needed. a lot of what they did yesterday had a kind of marketing and optics element, and i think it reflects the fact that the bank of japan went into this crisis already having stretched this monetary tool quite a bit. we are just getting that jobless rate coming through, again, bang on in line with expectations. a slight tick up. we expected some slackening as we had the state of emergency being declared. the social distancing impacting close quarters. jobs being affected. is the outlook much worse? izumi: i mean, you are talking about one of the biggest shocks to japan's economy in postwar

history, so it is really hard to marketu know, but jobs not deteriorating. we do see unemployment headed towards, you know, a little over year or so.next it is not good. we are going to see the rise of joblessness paired one thing i will mention is that there are stark differences between the labor market adjustment system in the united states and japan. in the u.s., you have seen massive unemployment in a very short amount of time. the consensus looks for unemployment to go to 16%. you are not going to get that in japan, because in japan, we have a three staged paper market adjustment system where it is ours not get cut first and then, you know, in time, the temporary and part-timers and the regular workers. it is a much more slower and gradual process and we have a lot more automatic stabilizers which should help a disorderly spike in unemployment. shery: that is very interesting

because that would be one of the areas that perhaps businesses would see getting reformed in japan. so what could we see in terms of the third arrow of abenomics in japan given the magnitude of the impact of this covid-19? izumi: you know, if you are talking about deregulation and labor market reforms, clearly, it is going to be put on hold. the policy focus right now, as you saw in the third fiscal support package that the government is trying to pass right now, is to focus on income support, and actually, you know, it is not just in japan, but across the world, as governments try to grapple with the shock from the coronavirus. you are going to ultimately see bigger government everywhere and probably a more interventionist approach, where it is in the markets or the real economy. so i think that reform will be

put on hold a little bit and i think what is more interesting is the conversation that happens afterwards, after this shock is over. when the dust settles on this crisis, basically, the voting public realized the rigidity in these protections are actually good. that is a conversation that will be interesting to follow. to thewhen it comes japanese yen, we have seen a lot of stability this month, especially compared to the swings we saw in march. what are we expecting in terms of currency strength given that we still have the real yield differential dynamics playing into it? that: our view is generally, the yen strengthens. perhaps not as much against the u.s. dollar because it is still going to be kind of a you know, risk off so maybe the dollar-yen will not lose as much but compared to other currencies, we do think the yen will strengthen

and the reason for this is a slow-paced argument, mostly because there was a lot of yen selling over the last few years centered on outward mna, you know, and also, japan had an energy -- a bank energy bill. that is all going to come down, so we do think the outflows will tempora little bit, and in theory, that should drive the yen a little bit higher. it has taken so long and so many extraordinary policies and fiscal stimulus to produce -- reduce the slight hint of inflation in japan. do the global headwinds that with imported deflation now a concern as well, does that mean the 2% inflation target is essentially irrelevant? think it is notable

that in the bank of japan's forecast yesterday, you know, they basically do not forecast 2% inflation in his tenure, 10 year -- in his 10 year. that will be put off for a very long time given the shock to demand from this crisis, and in the short-term, i think we are dealing with disinflationary impulses. we are going to have pockets of inflation because of supply chain disruption and food costs going up and things on tap at overall, we are talking about a week demand environment unless we have a massive step up in fiscal policy. windows the massive debt load that japan already has start to become a problem? -- thei think i actually answer to that question relates to the point i made earlier, which is that japan is not facing inflationary impulses right now and it is unlikely to for the foreseeable future,

given the weakness in demand, so i think the constraint on debt capacity, especially in a country like japan, that plans its own currency, and where participation in the bond markets is domestic, the constraint will be inflation, and we are not expecting that for some time. shery: always great having you with us. thank you. bank of america head of japan economics. huxley now, tim gives us his forecast for the industry as trade stalls and supply chains are hit. this is bloomberg. ♪

haidi: you are watching "daybreak asia." let's get you a quick check of the first word headlines this hour. lobo coronavirus cases are three 3 million with deaths above 200,000, although the rates of infections and fatalities continue to slow. china reported no new deaths and 12 straight days, and europe's hotspot, italy, reported its lowest levels of new infections in seven weeks. u.s. cases rose since the beginning of the month but the total is approaching one million. not be virus will defeated if we are not united. if we are not united, the virus

cksl exploit the cra between us and continue to create havoc. haidi: virus and death rates continue to fall in new york, recording the lowest number as governor andrew cuomo offered a phased plan to reopening the state economy. he said manufacturing of construction may be able to resume work for new york city itself to total deaths in the state have reached 17,000 although new cases of infections are falling. the u.k. government is calling on the european union to show what it calls political movement if the two are to reach a trade deal to prevent a heart split of the end of the year with no agreement. downing street says brussels must solidify some of its demands on access of regulations to ensure that to get what the u.k. calls a level playing field. a second round of talks ended last week with almost no

progress. china say progress on a coronavirus vaccine is at the critical trial stage but work is complicated and a treatment will be available soon market regulators are to ease virus restrictions on the shenzhen exchange. to ease funding restrictions on chinese new economy firms. tocould cut the listing months from years. next guest says some container ships have been running at only 20% capacity and numerous ones have been canceled. joining us to talk more about the impact of the coronavirus pandemic on global container shipments is tim huxley, chairman of mandarin shipping. thank you very much for joining us today. will continue to see a broader impact. tell us how much of a hit for your business is coming from demand destruction, low volumes, and how much because we are also seeing travel restrictions to

contain the pandemic? >> this is having a pretty devastating effect on container shipping. have 30% capacity expected to be taken out of the markets in may which we are seeing at the peak pandemic period. what we have early on in the outbreak in february and march, the immediate period of the chinese new year, is a huge destruction in demand out of china as there were problems of people getting back to work, but now, you have got factories in china, 80% of the workers are , and the production is up. you have fallen off a cliff of demand in the west and in europe and in the u.s..

you said you have 3 million containers capacity. it is having a very a serious impact on the industry. shery: do you have a sense of what industries are seeing the biggest impacts when you are looking at where your clients are coming from and what type of cargo business you are getting? obviously, at a time like this, if you are in locked down in the u.k., then you are not going out shopping. the shops are closed, so it's it is a really huge drop-off in demand for manufactured goods. when there is uncertainty about the future. not make big investments in a new car, new goods for their home, so that is really where you are seeing that falling off. obviously, there are some items where there is huge demand for it a lot of that is going on airfreight.

overall, it is in general decline in demand. clear view on a how things are developing for the lockdowns so you can begin to see any upturn in this. the restrictions in india have had a big impact on regional trade within asia. long-haul traits from far east to europe and transpacific may be hit with developments, but taking out a very big chunk of regional trade, that has affected a smaller ship of trade within the region so it is affecting all elements of the business at the moment. tim, do you see, after all of this, as economies be open, do you see permanent changes to the supply chain, be they forced dislocations as a result of supply and demand issues or proactive structural reforms?

tim: that is a good point. it is something we actually talked about all the time. 90% of everything goes by sea. the maritime trade is pivotal in the whole of supply chains. will the covid-19 outbreak lead change intural manufacturing if there is going to be the end of globalization? no, i think it will accelerate changes that were possibly already beginning to happen. i know people who were manufacturing in china and who were already looking at diversifying their supply chain partly because labor costs in china have gone up so much. of course, politics trade -- there was a lot of manufacturing moving to other places within asia like vietnam, cambodia, bangladesh. people will be much more conscious of their supply chains and probably not want to be overly dependent on one particular region. somenk you will see

changes but these are going to come in any case rather than being driven solely by this one off event. haidi: what is your forecast for the recovery going into the second quarter? tim: i think the second quarter is going to be pretty tough. overall, this year, in the container traits, there is a sense that you might see, for a full year, volumes declining by 10%. to returndoes begin to some degree of normality, what you are going to find is that it is not just a question of people are going to go out, and the economy will he be stimulated, but during this period, inventories will be run down. to meet immediate demand but also to rebuild inventories. it is also one of the sectors that could bounce back quite quickly. the profitability

and losses, last year, global container shipping, amongst the major carriers, made a profit of $5.8 billion. 10% for therop by year, that would probably mean the losses for the major lines would be 800 million. that has provided that we managed to maintain the actual rates on the carriage of each container, which so far, they have been able to do, but if those rates dropped to the same level of what they dropped in the global financial crisis, then the container shipping industry could make losses of over $20 billion this year and that would have a very, very significant impact on the long-term health of the business. shery:shery: we have heard economists talk about potential pent-up demand surging back and that could really help later in the year. do you see areas of your business where you think that output that has already been

lost will not be recovered? are alreadyu beginning to see that. you need to step back for another area of the shipping industry, bulk shipping industry. for instance, chinese imports of iron ore. the steel industry is a great bellwether of the health of the economies and what is going to come further down the line. the container shipping, dealing with manufacturing. iron ore imports into china. they have been sightly up in the first corridor of this year compared to the first quarter of last year. there are many different factors other than coronavirus that are affecting those trades and raw materials. mentos .2 manufacturing in china coming back. the steel industry is getting back on its feet. i think there will be a surge in construction, seamless packages in china in particular, which will help the global economy back on its feet. you are seeing this with the export of timber in new zealand,

for instance. that has been resumed. very strong demand from china, a lot of which is used in the construction industry. the shipyard to recover from this both in -- from the perspective of cruise line as being essentially imagining anyone who would want to get on a cruse, nor would they be able to, but now, when it comes to the container recovery being fragile before we went into this, are we going to see closures? what does the pipeline look like from your view? shipping -- cruise shipping industry has been hit very hard. there are a lot of cruise ships being built and demand will tail out for them. it will take a lot of time for back markets to recover because that is very much on a section basis. it is what people feel like. it is not like you have to move what you have manufactured. demand forterms of

ships and shipbuilding -- the shipbuilding industry. that really has begun to grind to a halt partly because -- not because of the virus, but partly isause of the way transport changing in terms of -- at the moment, it is difficult to know -- if you are going to order a ship, what type of propulsion system should you have? should you be going to lng or hydrogen fuel cells? there is a lot in the industry about what is the right ship to build. oft is stalling a lot investment. combined with the fact that is difficult to raise finance at the moment. haidi: really great to have you on those shoes. tim huxley from hong kong. we have more big guests coming out. the group ceo will be along with us in the next hour. the first on bloomberg. the ceo and cofounder will be

with us as well. the bgi group ceo. they will all be with us a bit later. this is bloomberg. ♪ oomberg. ♪

haidi: hsbc in focus today as it reports first-quarter results that are sure to have the ability to put the u.k. base, but issue focused lender under

increased pressure because of the coronavirus lead economic downturn. stephen engle joins us now for a preview of the results that are due midday in hong kong. steve, what are we expecting, what are you bracing or, i guess -- bracing for, i guess? >> the new permanent ceo bracing for a baptism under fire. this is the first result, set of quarterly results, since he was named permanent ceo a month ago. he was put on a temporary basis after mr. flynt was let go by the chairman in august of last year. but he has a whole slate of worldnges, as the whole does, given the global impact it is having, so we will be looking at hsbc first quarter loan losses and provisions that they ,an layout of lower revenue environment amid the interest rates, globally, going down. the dividend got halted. that has really angered a lot of

investors, especially here in hong kong. any guidance on when the dividends can be resumed, of course, they had to halt that dividend following regulations on u.k. financials to conserve capital through this difficult time. the job cuts plan and the transformation plan, how are they going to phase this job cuts? right now, they said the executive board has talked about now is not the right time to lay off people, however, they already laid out plans to cut some 35,000 jobs. they will put that on hold, any kind of clarity we get from that will be very useful, of course. noah quinn says recently that they will push ahead with the transformation plan on cost savings wherever possible. what are we expect? 4.3 7 billion u.s. dollars, adjusted revenue, -- please are bloomberg intelligence estimates right now. we will get those numbers

midday, and again, a lot of clarity we want from those loan-loss provisions. keep in mind what is the extent of hsbc's exposure? that is the singaporean oil trading that is subject to a police investigation and all the oil traded losses. shery: let's stephen engle. atwill speak to hsbc cfo 1:15 p.m. hong kong time. you can watch it from sydney at 3:15 p.m. westpac now taking a 2.2 million aussie dollar first half impairment chart. covid-19 impact on banks remains highly uncertain. they are also saying capital inspectedmarch 31 are to be 10.8% again. westpac taking a 2.2 billion

aussie dollar first half impairment charge. we will have plenty more on "daybreak asia." this is bloomberg. ♪ these days staying connected is more important than ever.

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we've always believed in the power of working together. that's why, when every connection counts... you can count on us. haidi: good morning. asian major markets have just opened for trade. welcome to daybreak asia. .ur top stories 10.500 rising since march something again after saying it would offload in june futures.

outlook for banking and australia in the face of public mistrust, the coronavirus and economy. by ross.ined seeing -- are shery: japan is under pressure with the nikkei down .2%. this as we hold steady. this after the boj announced that it will be buying the many government bonds as needed. they are doubling their buying of corporate debt. gaining .4%. this accelerates gains against the u.s. dollar. we have seen the korean won gaining ground. sellingseen exporters

dollars as well because we are headed towards the end of the month. april consumer confidence for korea falling for a third consecutive month. there is a lot of uncertainty when it comes to what happens around north korea. we have seen a lot of speculation on what happens with north korean leader kim jong-un. haidi: a lot of geopolitical upset, on top of everything else. study.and a flat start to the session. yieldslooking at bond ahead of a large auction when it comes to the aussie dollar holding above 64-bit slipping with the kiwi that is being weighed down. rate intoe cash

negative territory. we are watching the big banks after some updates when it comes to trading numbers. looming large. take a look at the oil space. we have oil in asia holding out at about $30 a barrel. it will be dumping those crude contracts amid dwindling storage and oversized supply situation. that is what we are seeing when on monday. print on monday. shery: here is a look at them of the big names. so far, 62% of the companies who released have so far missed revenue estimate. joining us to discuss is

director catherine young. great to have you with us. really difficult to predict where earnings are going at an uncertain time during this coronavirus pandemic. valuations,u seeing stock prices being attractive at the moment in asia. because there is a lot of uncertainty. you could argue that china seems to be bucking the trend opposed to other markets, as well as globally. it is an interesting dynamic that is playing out. again, a time when you are seeing a lot of companies around the world suspending or delaying their payments. shery: given that china has experienced the coronavirus

pandemic first and is the first to come out of the economic impact, what sectors are you liking right now? those pre-pandemic names that a lot of endeavored are -- investors were looking at before the outbreak of the virus. heavilyso focus quite on the makeup of the market in china. the mutual fund in the local market versus the norm. funds hold back while localcap investors hold 4.2. they tend to prefer the more gross names. board haveross the opportunity, but mindful of

earnings going forward and valuation. where do you see resilience when it comes to trading themes? there is e-commerce, cloud and health care, but which of these would you see as enduring once we get on the others of this? expecting gdp growth to continue a downward trend in china. what out pieces is consumption. sumer is about resilient and it is a long terms. even when we see supportive measures that they are putting in place, some of these are aimed at the consumer. we are seeing a few rounds of this supportive measure being implemented. we are also seeing this acceleration of products and services.

those valuations look a bit rich. of entry orin terms reentry. it is delivering earnings and paying that income. they are very attractive in our mind. not a as you say, this is market -- looking like we are bargain-hunting at the moment. >> what we are cautious about, especially during march is that companies in china perhaps not being as concerned. if we enter a period of really slow growth, china will not be immune to this. -- it does come from

a net domestic side. we have to be mindful that the markets are not going to be immune from what we see over the short to medium-term. that was fidelity director catherine yeung. some of the movers today, we are move.y seeing a it after a gave a trading early this morning. pressures.ce similar to the ceospeaking of national australia bank. discussing the banks earnings, its plan and its completion of that to billion-dollar capital

raising. that is in about 20 minutes time. this is bloomberg. ♪

cases arecoronavirus through 3 million. the rates of infection and fatalities continues to slow. china has a ported no new loss of life. italy reported the lowest levels of new infections and seven weeks. u.s. cases rose at the slowest pace in over a month. >> this virus will not be united., if we are not if we are not united, the virus will exploit the cracks between

us and continue to create havoc. >> japan is adding 14 more countries to its travel ban list. the affected nations include russia, as well as saudi arabia. allowed in.t be 70y had already banned countries from entry. japan has more than 14,000 virus 364 deaths. loans for small businesses amidst plan reopen the economy after a 30 day lockdown. those leftn to help without a job after the virus. this is bloomberg. -- global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than

2700 journalists and analysts in over 120 countries. this is bloomberg. haidi: china's biggest banks will be releasing their first tuesday.arnings on let's get more from our chinese correspondent. we had more data coming out of the performance of big lenders and the current industrial situation. what do we know about the pressure they are coming under? >> it is clear they had facing mounting pressure amidst uncertain economic outlooks. investors are expecting more problematic loans. the central bank policies may continue to crash asset yields -- crash asset yields.

yields. asset it is clear that in the first quarter come the virus made a small dent on asset quality because of the policy meeting. investors are expecting to see a mars mifid can increase in the second quarter -- a more significant increase in the second quarter. a possible increase in the nonperforming ratio. looks somewhat conservative given today's reality, the amount of provisions. it will give us a clue to how they may increase. shery: what are we expecting from the big four this week. -- this week? >> they are bracing for an unprecedented drop.

chinese lenders face additional credit costs of almost ¥1.6 trillion, warning that the sharp increase in capital strength. they have been pushing big banks to lend more for small businesses that were the hardest hit by the lockdown. to help the struggling businesses come at a cost to their profits. expecting loan-loss charges could jump an average of 26% this year, compared to the 3% before. they are expecting profit to slide 8%. all the big banks in china do face pressure, but bloomberg intelligence think that it could be especially pronounced for the country lenders since it took the lead in making these loans to those impacted by the pandemic. shery: thank you. we will have more on bank

earnings later in the show. -- wel be joined by jim will be joined by our guest. wti slumps again amid falling demand. -- theloff i the biggest selloff. this is bloomberg. ♪

shery: goldman sachs says markets will hit while capacity in the next three to four weeks, sparking larger production cuts. global head of commodity research, jeff curry spoke to bloomberg earlier. >> over the next three to four weeks, the world is going to hit storage capacity constraints and really test those capacities.

once they do that, once you hit those limits, supply has to equal demand, no matter what. that is see the large production cuts happening. next likely coming in the two to three weeks. much ofing to become the larger global phenomenon. saw inolatility that you wti last week. the key message is we are not out of the woods yet. this inflection phase we are in ,ight last three to four weeks at which point, when you get to june, this market might be in a deficit. you are shutting that supply down. peak lockdown was a few weeks ago. a deficit market will be reborn sometime in the late rain or early summer, -- spring or early

summer. shery: how much volatility do you fact? violentll be a rebalancing process. look at today. we are heading back down again. system bumps up against transportation, processing or storage capacity constraints, these prices spiked to the downside to take that supply out of the market. volatility, but when they go down there, they pop back up. or 40% up or down. we have seen the shut already happen. what is your expectations for demand picking up? >> let's look at what we are

learning from china right now. the one thing that was apparent is it favors industries like construction, infrastructure, heavy industry labor, practicing social distancing measures in the work laced -- workplace. services and consumer goods have lagged. a lot of caution because it is a v-shaped recovery. the way we have modeled it is, we are using china as the prototype. we think it will work very well on the way. on demandf thinking recovery, we are looking at what we are seeing in china. 23april we were down around or 24 million barrels per day. in may, it will be closer to 18 million barrels per day. it will be a gradual process, but the key point is demand recovery is v-shaped.

supply recovery will likely be l-shaped. >> interesting. that is the outlook for oil. i am wondering if it is the same for the metal market. why? to the goes back recovery we are seeing in china. manufacturing, construction and infrastructure. copperike iron ore and has been in strong demand. overlay that on top of huge restocking demand and pent up demand. to give you an example, the chinese have moved forward the building of the 2022 olympic facilities, to get it done this year. that is all temporary. we think there is a lot of downside risk to these like iron ore and copper.

this month and early next month will be the weakest part for chinese exports. demand in places like europe and the u.s. is weak. to price it in. finally, in many countries that have social distancing measures in place, south africa, peru and --ada -- these minds will be mines will be restarting. a lot of downside risk. >> -- shery: that was the head of commodities research. week markets will be dominated by earnings. ets.e learning about the a lot to cover. -- etf. a lot to cover. su: the big question is a possible collapse. if you go into the bloomberg,

check out btv 6117 dtv on bloomberg. of all the mother patterns. it is in a class of its own. the technical analysts are saying that the bloomberg commodity crash may just be starting and we could see it tumbling to levels not seen since the 1960's. we just heard about the storage capacity limit. we could possibly test that capacity in three weeks. check out the biggest etf out there, the u.s. oil fund. it is causing havoc for the oil market and it continues to do so, mainly because of the glut in oil. thes causing them to dump crude oil contract and really intoout its rollover contracts that are a lot further

out. these changes are detailed in the regulatory filing. it is not anything that the market is wanting to deal with right now. finally, the industry is facing long-term change. the coronavirus is causing a lockdown, causing a bill drop off the cliff and demand for energy fuel -- in demand for energy fuel. what does work in commerce look like when we come on the other cited these? that will really impact the oil companies. shery: how ugly could the earnings beat for these oil companies? su: some of them have done pretty well for the quarter they are reporting. it is about the outlook. offill really kick things on tuesday with bp and shall -- shell and exxonmobil.

exxon is in the best shape financially. inleads the oil industry terms of financials, and its access to the finance markets. the real questions for a lot of , ise companies, bp included dividends. dividends are the big focus. the biggest companies have always had one primary aim to tax the dividend, create study payouts for years. it is one of the reasons so many people invest in oil companies to get those evidence. -- dividends. these announcements will be big. if you look at how the oil companies have been trading in the last session, they were all in the green. there is some optimism, but the volatility for stocks and industry continues. su keenan on the latest oil earnings.

fewill hear from a ceo in a hours at 2:30 p.m. in hong kong. people not want to miss that. we have an alert. attaching metals under -- customers were given false test results for some specialty steel and other products. they have launched external investigations. probe, they are looking into hitachi metals. mcewanup next, russ joins us to discuss -- ross mcewan joins us to discuss. this is bloomberg. ♪ staying connected your way is easier than ever.

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>> this is daybreak asia. ,irus debts continue to fall reporting the lowest number in almost a month. a phased plan for reopening the economy. manufacturing and construction may be able to resume work by may 15. total deaths in new york have cases of7,000, but new infection are falling. new zealand is entering the post lockdown world as it lifts some of the most stringent instructions. that is been no new community transmission and the worst-case scenario seems to be avoided.

the government warned that social distancing will stay for the seeable future. pre-covidot return to life. of 5t there, our team million needs to have zero complete our goal of eliminating the virus. >> scientists and china say progress on a that is under -- in the clinical trial stage. it will not be available anytime soon. market regulators are to ease restrictions to ease funding restrictions on the new economy. u.k. government is calling on the european union to show what it calls vertical vent, if the two are to reach a trade deal at the end of the year. brussels must modify some of it

demands on access and regulations to ensure what you can cause a level playing field. a level.k. calls playing field. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. haidi. haidi: shery. check let's get a quick on how the markets and trading at the moment. we are seeing the nikkei under pressure. coming we had the boj end line, broadly in line with estimates. broadly in line with estimates. we have the job numbers out today and sis affecting -- suspecting that the unemployment deal withwide as we

the coronavirus outbreak. big changes to the business continuity plan and major market volatility. chairman douglas lent is warning that managers should expect capital to perform worse than expected in the foreseeable future. stands us who he thinks to lose the most. >> it is clearly very difficult. , theysuffering the most have no ability to add to their savings. their savings is enumerating more than it used to be with interest rates virtually nothing on savings accounts. have been which significantly curtailed. that are in difficulty, in terms of cash flow and funding have no choice but to cut the dividend.

cannotes seeking support , in any degree of credibility pay money out to shareholders while seeking public support. those companies that can pay a dividend, we are very fortunate and pleased. we were very pleased that we were able to recommend to shareholders that we do pair final dividend. we have the initial strength to do so. those companies who have the strength to do so, they should. -- those with the jobs of their colleagues at risk should not. they should make their balance sheet more resilient and prepared to resume dividends once they had the business model in the new world, post, -- post covid, operating.

it is part of the consequence of this crisis, that those who relied upon the capital performing in the way that they expected are going to be disappointed, that it will be less and what they hope for in the short-term. it means that in the long term, it will be in better position for those who have their capital invested in the markets. is everything on hold or does it actually accelerate is meant a little bit? >> they will be on hold until there is a greater clarity in what will happen after covid is dealt with, in terms of moving to the next stage. it would not be possible in this stage to understand what the

business model and revenue and cost model will be going forward. over,re when this is all certainly in our sector, people will look at the benefits of diversification, having a broader product range and distribution, having a greater scale to absorb the cost base and a lower revenue model, if markets stay at levels lower than they were before. i'm sure there will be some consolidation that takes place, in order to adjust business models. we are well ahead of that being possible to do or to be contemplated. our responsibility at the moment is to make sure that our workforce is well looked after, that we are agile in the way that we deal with working from home and respect the fact that many family circumstances will

be very different, depending on what their partners are doing, whether there are children at home, whether there are parents that they have to look after. have to be thoughtful about managing our colleagues at the moment. that was chairman douglas lent talking to us early -- flint talking to us earlier. a lot of news for lenders. .e had earnings as the completion of its capital raised this morning, that stock resuming trade after being halted yesterday. about 2.3%. we will be speaking with ross mcewan in a few minutes. impairments as a result of covid-19 weakness, as well as a few other details as to how the pandemic will lay out the economy. 4%.pac is up close by

a lot of analysts saying the capital raising will be beginning and others will follow suit. lots more to come on daybreak asia. this is bloomberg. ♪

shery: we are getting the latest coronavirus data for april 27. china reporting no coronavirus deaths.

the 13th straight day where we have seen no fatalities from china from the virus. cases a symptomatically for april 27. continuation of that trend. a quick check of the latest business flash headlines. apple reported to be pushing iphoneoduction for models by about a month. it is not clear exactly why. dow jones sources saying that it will be delayed. to comment.declined they were supposed to lunch later this year. apple is said to be scaling back the number of iphones that it will make by 20%. china's group is suing global investment to force the south korean company to complete a 5.8 billion dollars luxury hotel buyout.

they claim they are reneging on the deal because of forced hotel closures and unfavorable conditions. they would do to close on april 17. they have asked the beijing insurer for more time. been starbucks rival has byed by a in -- raided investigators. they moved in at a request. the stock has plunged since the company admitted some executives may have fabricated sales .umbers operations are normal. investorstralian bank have had a first taste of a horror of an earnings season. it was completed this morning.

joining us out of melbourne is our chief executive, russ. -- ross. are most concerned that credit loss provisions, as a result of the exposure to covid-19 -- is this going to be a v-shaped recovery at a time that most economists are thinking that u-shaped nightly the best case scenario? is there concerned that these will not be enough? is that no one is sure whether it will be a v, u or l. based aroundns are a number of scenarios. we have been pragmatic about the fact that this is damaging businesses in the u.k. and

human, which is where our primary operations are. great support from the government. very decisive action to take on more capital to reduce the dividend. large adjustment. these are uncertain times. there is no playbook. we need to make sure that the banks are in a secure edition. -- position. haidi: he said it is a balancing act. there are concerns that this was done in part to support the dividend. does that mean that it is the first of many? what conversation are you having regulators? dividends, it is a balancing act.

happy.reholders are not some thought that we should have cut it altogether. our view was that we should raise capital. we would like to invite our retail shareholders into that. we wanted to make sure that they stayed on the register with us. this was a dividend paying stock. i think we did strike the dividend of 3e, a billion. it was a balancing act. we spent time with the regulators, going through the economic scenarios.

shery: how much have you factored in? we did take about a week ago, some additional remediation costs for the work that we are doing to write some things that were wrong. those increases were shaken about 10 days ago -- taken about 10 days ago. we still have work to do their. .e are trying -- there there are a number of remediation, but they are much smaller than the actual $. signs.ar

we would like to get them finished as quickly as possible. shery: we are now seeing more talk about australia and new zealand could be opening up to each other but not the rest of the world. we could see travelers to actions for a long time to come. how are you positioning for a different world after the pandemic is over? talk certainly heard the from new zealand about wanting to open up with australia. i have not seen any detail on that whatsoever or whether australia is ready for that. we are seeing significant changes in how we operate our business. this week, we could operate with about 5000 of our colleagues working away from our today we have about 95% of our colleagues working from home, which is a different world. cash is coming out of the system because people do not want to touch it.

they are using their cards and avoiding cash at a merchant level and customers. you are seeing dramatic shifts in customer behavior, as well as how we operate with our colleagues at work. it will impact, positively going forward, as we move more towards digital operations. we are having to work with our customers to make sure they are looked after. there are a lot of things that will not change. that is the relationships that we have with our customers being very strongly built, particularly at the business level as we have strong communication to help them through what is going on here. much underperformance are you seeing in the loan book? will be be looking at these being spun off into a bad bank?

are these questions being held with the government? >> no conversations with the government on the regulator of taking those sorts of actions. we talked economic adjustment of about 700 million as part of the results. theill not really see impairment losses coming through for another five to six months. given tens of thousands of customers both personal and business customers the opportunity to take a principal and interest holiday without income or having reduced income. back to the conversation about how to make these payments again, we will see if they are in good shape or not. it will be helpful for those customers.

employers will keep them employed. i think we have another five to six months before we will really understand the true impact. the economic factor shows this will be a tough period of time. that has shown through and what we have done with our assessment of the market and some of the scenarios we have run. we all need to make sure that business government and our regulators, all parties are working strongly together to get .his economy the again -- this economy moving again. customersy of your are retail investors. small and midsize businesses. i am wondering after the financial misconduct, after a terrible start to the year with the bushfires, do you think this is an opportunity to

rehabilitate their reputation? it brings back the real purpose of a bank. we are here to work with our customers. we are certainly seeing a difficult time for our shareholders at the moment with dividends being cut. economy.ion of the we have reached out to tens of thousands, to work with them to get them in good position. we are making the assumption of bed business, that they will a good business coming out. there are many businesses who were struggling before and we have to be careful not to lend them more money that they will not be able to pay back. we had a good bank, good businesses and it is clear from our strategic work that we just need to execute a little better.

i have full confidence in this bank for the future. does bring the real purpose of a bank, that i think the government and community are seeing is working well together on. shery: thank you very much for your time today. the chief executive day. you are watching daybreak asia. this is bloomberg. ♪

shery: loan losses and the future of the restructuring plan are likely to be the focus when the latest results are announced in a few hours time. let's dig deeper with the ceo, francis bloom. way to have you with us. the key question is what happened to those bad loan provisions. how bad could it be for hsbc? we have seen plenty of challenges. think most analysts quarter.s first they were up by about 40%. increase into an position, like we saw the week before.

something like 600 million u.s. dollars in losses there on a single account. most people predict that it will increase 100% to something like one billion u.s. like 13 billion. around 4 be somewhere billion. it is a difficult operating condition for hsbc. they are still financially healthy because they saved quite a lot of money,

which really caused the bank to lose a lot of support among hong kong shareholders. shery: exactly. that did not sit well with shareholders. when will they have to rethink that? there -- >> there are talks about maybe next year in february or march, they will declared the four-year package. forget about dividend. quickly, how much are we seeing on cost cut?

are they doing it right? >> i could not hear. >> cost cuts. how are they doing? cutting costs, when it comes to cutting costs. thank you for joining us. we are facing a few technical goatees. -- difficulties. 1:15 a.m. -- amid bigs after that bank earnings. do not miss those interviews. we are looking ahead to trading in shanghai and hong kong. the market open. the china open is next. this is bloomberg. ♪

>> it is 9:00 a.m. in beijing. welcome to "bloomberg markets: china open," i'm tom mackenzie. >> and i'm david ingles. the trades.ing down our top stories this tuesday morning, we are looking at oil yet again, crude slumping as the top oil etf unloads. south korea is now set to run out of storage space, setting up a neal