♪ shery: good evening from bloomberg world headquarters. i'm shery ahn in new york. stroud-watts in sydney. welcome to daybreak australia. here are the top stories. stock to the highest since early march amid promising signs for an experimental vaccine. oil rising to pre-lockdown levels and china's demand all but recovers. softbank loses aliens on start up debt that sours and masayoshi son says there could bestock too come for the vision fund.

australia-china relations think again with beijing slapping penalties. australia will challenge the move at the wto. shery: let's get you started on how the markets are trading. u.s. futures under a little bit of pressure, down 1/10 of 1% of the open. this after u.s. stocks jumped the most in six weeks during the regular session. it was a risk on trade. stocks finish at the highest level since early march. the s&p 500 saw gains in cyclical stocks that have been battered leg energy, autos, banks. more than 90% of the s&p 500 gained ground. more haven stocks did lag. the nasdaq rose 2.64%. we did get some comments from fed chair jerome powell before the hearing tomorrow. the fed prepared to use its full range of tools as the benchmark lending rate reaches zero until the economy is back on track.

see how markets are shaping up in asia. sophie kamaruddin joins us in hong kong. soph? sophie: the bulls perk up in asia. we have futures pointing largely higher. nikkei futures fell somewhat but havens remaining under pressure. gold holding the biggest drop in a week, trading. oil opening higher, jumping 3.2%. this ahead of june futures expiring this tuesday. we have seen risk on moves play out in the quarter. the aussie dollar holding above 65. kiwi above 60. check out the respirometer. just holding around 70. this after rising the most in six weeks. the euro trading at 1.0916. this after jumping on germany and the fed agreeing on in a

package. tokyo trading kicks off. we saw the u.s. yield curve steepening with five to 30 with the steepest levels this year. early in the asian session, we are seeing treasury future slightly higher. shery: chinese president xi jinping promising to make any coronavirus vaccine universally available once it is developed. reiterated beijing support for the world health organization. the pledge is part of efforts to diffuse criticism of its government's response to the pandemic. strengthen international cooperation. mankind is a community with a shared future. solidarity and cooperation is our most powerful weapon for defeating the virus. shery: tom mackenzie has more from beijing. whether it is on the pledge to

support the who or trying to consume -- secure vaccines for the entire world, it seems that president xi jinping age trying to dry contrast with president trump. tom: absolutely. from of global outreach president xi jinping. this is a speech at the governing body of the world health organization. xi, as you heard in that soundbite, calling for greater international cooperation in fighting the pandemic. any importantly, saying vaccine developed in china would become a global public good. china currently has five vaccine candidates already in human trials and they expect more candidates moving into the trial basis in the next few weeks and months. providesaid china would $2 billion over two years to support the fight against the virus. drawing a distinction to the trump administration which is choosing -- china has come under

pressure not just from the u.s. but also the eu and australia over the initial handling of the outbreak. it's relatively aggressive response some would say to any criticism. it still has resisted pressure for an investigation. we heard from officials yesterday saying the timing is not yet right. certainly in terms of his response, xi jinping trying to show they are ready to cooperate with the rest of the world in issuing the vaccine. meantime, more than 100 million people back under lockdown in the northeast in china. the infection numbers are not terribly high, but does it suggest authorities are taking no chances when it comes to a potential second wave? tom: you are right. 34 confirmed cases so far in northeastern china. it has led to this very aggressive move by officials there to effectively lockdown

180 million people. you are looking at trains and buses cut off. schools shut down again. quarantining tens of thousands of people and that points to inning zaidi of a second wave. and the economic cost that could come about. there is frustration among residents we have been speaking to in those areas. it is a reminder of the fragility especially for china and the rest of the world. shery: when it comes to oil demand recovery in china, it seems to suggest that country is back to activity up perhaps pre-covid-19 levels. tom: we are hearing from oil traders saying consumption is about 13 million barrels a day. that compares to 13.4 million in may of last year. year-by-year comparison, just shy of that number. we have seen back in february demand crash by about 20% as the country went into lockdown. we have seen demand pickup for gasoline and diesel.

the jet fuel that is not quite gotten back up in the pre-prioress levels factories are back open, commuters are open which lead to bigger to expected demand. china being the second largest consumer has led to tightening of the oil markets sooner than expected. tom mackenzie there in beijing with the latest. coming up next on daybreak withalia, biotech company hope of early signs of its experimental vaccine that it could fend off the virus. we will bring you our conversation with the ceo later. coming up next, vaccine optimism giving stocks a boost. we get the market outlook. this is bloomberg. ♪

karina: you are watching daybreak australia. coronavirus rose 1.2% monday in the u.s., the lowest daily increase since the end of april. the news came as an experimental vaccine issuing promising signs based on a small human trial. in new york, governor andrew of the stateme including buffalo will be written able to reopen on thursday. germany and france are backing a 500 billion euro fund to help the european union survived the worst recession in living memory. angela merkel and macron was of us do should be the equivalent of $543 billion to member states based on their contributions to the eu budget. it is a major step towards bolstering the firepower without breaking german rules over borrowing.

>> europe must stick together. this is about rapid economic recovery. therefore, we want to set up a temporary fund in the region of 500 billion euros which will be from the eu budget. not a credit, but rather a budgetary expenditure which will be provided to the most affected sectors in region. have asia's biggest economies are fighting to show up growth amid the coronavirus. indonesia is ruling out any rapid easing of lockdown restrictions as cases like betting travel. india is being warned its $277 billion relief package fall short of expectations by failing to deliver an immediate boost between economy that was slowing even before covid-19. global news 20 for hours a day on air and on quicktake by bloomberg powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. shery? shery: dive deeper into the market action. u.s. stocks surged the most in

almost six weeks on monday following promising early results on experiment of coronavirus vaccine and comments from fed chair jay powell. let's head to philadelphia to talk to the executive chairman, jon hertl. we have seen chair powell seem pretty busy. media appearances and that we are going to get the senate appearance tomorrow. how in point has is that using -- how on point has his messaging been? >> i think the message from the chairman is from the federal reserve completely has been one of unqualified support. whatever it takes to support the market and to support the economy, they are going to do it. he has been consistent with that. that is what the market takes comfort in. shery: we have seen a little bit of a change when it comes to market leadership with battered cyclical stocks gaining ground. we have seen the russell 2000 also getting the most in about a month.

could we see a change in leadership? could we see more changes to the pandemic and perhaps they rather quick reopening of the global economy? an organization of chief investment officer's so we are running long-term money for serious investors. we want to have a bright line between real investing versus trading or speculating. so, a lot of this short-term roshan is things like people recovering shorts. the stocks that have done so poorly have gotten beaten up. a lot of times when you see a rally like that on a big date like today, people are covering those shorts and stocks that have gone down so much with the ones that have gone up the most. of -- in terms longer-term investors, serious investors, not those trading our to our, day by day. if you take that longer-term approach or even a medium-term

approach, there is ample opportunities out there. would you be getting into these very beaten-down travel and leisure and energy names that perhaps won't see a recovery in the next one, two years, but beyond that are looking solid in terms of fundamental growth prospects? jon: the biggest factor of these very lowest interest rates. that means stocks in general is the place to look for they are going to be winners and we know what they are. i.t. stocks and cloud stocks and online retailing.we know what the losers are . things like airlines and hospitality and so forth. what is not clear is among the losers, among the stocks that are the most stressed, which ones will actually win? who have clear winners and then you have the group below that will be challenge treated in that group of stocks that are challenged, which ones will survive and prosper? that is where there is money to be made, even now, but it is harder to call. there was so much uncertainty and you and you really need to

rely on specialist managers to separate the winners and losers in that lower challenged area i just mentioned. tell me about some of the challenged names that are at least worth a look at this point. jon: if you look at the groups -- we'll rely on our specialist to pick the individual names but the most dramatic is energy. energy is not going away as an industry. there are clearly lots of stocks comic some of which will survive and someone speed the ones that do survival to got market share from the ones who don't. that is an area. travel, hospitality be if we get a quick vaccine -- by the end of the year. for some sign up now hospitality things like cruises. out, it is a third of the price it would have been and there is no penalty for canceling. if we get a u-shaped recovery based on a vaccine and next year

at this time, things feel more like normal and some of those very beaten-down industries like cruise lines might be a place to make money as well. each one of those is a tough call. you've got to have deep knowledge about the company specifics. shery: especially when it comes to your energy call. the question right now is whether we are going to see a recovery of oil demand to complete coronavirus levels and when that is going to happen. even if it does happen, are we going to see fundamental changes in the energy industry away from oil majors and perhaps more sustainable energy? jon: i think that is true. but there is no asset that is a good investment at any place. there is almost no asset that is not a good investment at some price. when things get very beaten-down , you get this baby out with the bathwater phenomenon and a tremendous opportunity for active investors to step in. it may be too early in energy. patients is the name of the game

with these stocks that have been challenged so much, these sectors that have been challenged so much freedom we don't need to rush in now but we want to participate in the market broadly and look for opportunities as the fog clears. shery: when you look at these names, especially in the hospitality, travel sector, do you expect global demand to recover in a v-shaped way where you are going to see the demand, the pent up? demand come back at once or is it going to be more gradual? if that is the case, when did you time when you want to get into those names? jon: i don't want to give you a sense of false precision. no one knows whether it is going to be a v, u, w, or l. it looks more like a u these days because of the news that continues to come out about the virus. we jiusust -- you cannot know fr sure. there's two types of forecasters. those who don't know and those

who don't know they don't know. what really need to do is wait and let the facts reveal themselves and then we can make more intelligent decisions on what risks we are really going to take. today, there's a tremendous amount of uncertainty about these individual names. we just have to wait. let's take our time and that the facts reveal themselves so we can make her decisions. -- better decisions. haidi: there has been a lot of conversations about the changes in human behavior, incorporate behavior as we get on the other side of this pandemic. given the chance this is going to be a short, sharp recession, our conversations like that useful at this point or do you think it has been such a short time that consumer behavior will go back to exactly where we left off? is investmentsns run in cycles.

when you're in the middle of a cycle, for example a bank that is making loans. and the bank is being aggressive, making aggressive loan where the collateral is not as good as you might have hoped. mature comeloans until you have the other side of the cycle, the company making the most aggressive loan makes more money. they get fees for creating the loan and so forth. it is not until all of those loans mature and you figure out which loans are good loans in which one were bad that you understand which were the best bank. in the middle of the cycle, the loans making more actually earn more money. that is true in every kind of cycle. if you have more leverage, if you are doing more share repurchases, while things are going well, you look like a star. words,hey turn, in other if you get too conservative to quickly. like you are behind the times. this notion of how to manage through a cycle has always been

a business challenge and will always be one because cycles continue to happen. it is too early to tell whether the social changes as we mentioned will actually take hold or if there's a lot of dialogue. haidi: thank you so much for joining us, jon, callahan executive chairman with us. we appreciate your views. we are getting breaking news when it comes to the infection rate in brazil. it has now surpassed the u.k. the third-most coronavirus cases globally. we do note and addition to the political instability and crisis we have seen, brazil now facing the public health aspect of that. brazil passing the u.k. with the third-most virus cases globally, 254,220 covid cases at the moment. it is worth telling you about another big interview we have coming up. we will be speaking to the

malaysian opposition leader exclusively at 1:30 p.m. in sydney, 11:30 a.m. if you are watching in hong kong. coming up, the future looks blurry for masayoshi son's vision fund. it lost nearly $18 billion in the last financial year. we break down the numbers. this is bloomberg. ♪

haidi: the japanese investment house softbank is licking its wounds after securing bets on a new economy companies like wework led to the company's worst ever full-year loss. theder masayoshi son says third vision fund may be the last. stephen engle joins us. we knew it was going to be bad but how bad was it? stephen: vision fund lost a

staggering 17 -- $17.7 billion last year and that forced softbank valuations in the holdings of those copies we talked about, like wework, uber, oil and hotels. the return was a -6%. that is compared to a positive 62% return just a year ago. that in may of last year, softbank posted its highest ever operating profit. it's cliche to say but what a difference a year makes. the situation globally is much different with the pandemic really affecting business sentiment worldwide. thatt was also bad bets masayoshi son admitted to. this is what he had to say last night at the press conference. >> the large size invest these are surviving and doing steady, and have a better chance of going through this valley of coronavirus. the exception is wework. we made a mistake and i admitted

that many times. i was bullish and made the wrong decision. stephen: he not only admitted to such mistakes but also he did not anticipate how the global economy would be affected by the fallout from the pandemic. right now, what softbank is doing his racing to put its house in order with another $500 billion share buyback announced yesterday. plans to share 4.5 trillion yen in assets to shore up balance sheet and stock price which held up fairly well given the trouble. alibaba likely to sell stakes in its mobile unit as well as t-mobile. the domestic mobile unit is pretty well as more people use the internet on their phones but it was the vision fund losses that drag it down. by the way, they may not pay a dividend this year to preserve cash. shery: masayoshi son set earlier he wanted to see a new vision fund every two to three years. what happens to that plan and what happens to this vision fund? what's next? stephen: that plan to raise a

new vision fund every two to three years beyond this initial fund was before the we work meltdown and before the covid-19 outbreak. he says the vision fund results are not something to be proud of. if the results are bad, you cannot raise money from investors and that is the key right now. i am sure the key investors are not pleased with his risky bets. masayoshi son says he will continue to invest through the fund with his own money, albeit more cautiously this time. shery: stephen engle there with the latest on softbank. we will get more analysis on the company with jeffries managing director. he joins us in the next hour of daybreak asia. now, a quick check of the latest business flash headlines. uber is slashing another 3000 jobs and closing dozens of offices as the coronavirus hammers travel demand. the latest cuts follow the

dismissal of 3700 staff and customer support and human resources earlier this month. and now represents a quarter of bloomberg's original workforce. the ceo has written to employees and says it would be the last job cuts. staff will work remotely until the end of this year. the ceo says the aim is to have 50% of the workforce back in offices by the end of 2020. however, he does not expect to meet the deadline. the new york-based credit card issuer will limit the number of people in elevators and require all staff to where face masks when moving about the office. netflix is topping rival disney and amazon and reliability surveys as the coronavirus keeps people at home in front of their screens. jd power says customers are reporting fewer service issues, putting netflix ahead of hulu, disney plus, prime video and

youtube tv. coming up next, drugmaker maderna has far to her that it is experiment a vaccine can fend off the virus. we have more. this is bloomberg. ♪

karina: you are watching daybreak australia. fed chairman jay powell confirms he is prepared to use the bank's full range of tools until the u.s. economy is back on track. the remarks released ahead of virtual testimony to the senate banking committee, he promised strong support in challenging times, although any actions a part of a broader public suspect or response. he will speak remotely on tuesday morning. china is pledging to make any coronavirus vaccine available to all in an effort to diffuse criticism of the handling of the pandemic. president xi jinping addressed the world health assembly, calling for greater global cooperation to fight the virus. he promised to billion dollars

to support the fight and offered backing from the world health organization's efforts to control the outbrak. eak. >> vaccine deployment in china when available will be made a global public good. this will be china's contribution to ensuring vaccine accessibility and affordability in developing countries. karina: meanwhile, china has left an 80% penalty on barley from australia for five used. the measure is effective immediately and includes almost 74% of duties. around $900ports million of barley to china each year and says it will challenge the ruling at the wto. it has been pushing for an independent investigation into the origins of the coronavirus. ma will skip china's most boring event of the year amid reports of

uncertainty health issues. one of china's political and corporate leaders gathered to debate targets for the year. despite the absence, ma is said to be preparing to submit several proposals for discussion. global news 20 for hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. haidi? haidi: the early results from the experiments of vaccine are showing signs it could create an immune system response to fend off the coronavirus. the results of an initial study to determine the safety of human volunteers, the ceo told us what is next. phase one with efforts. the next study is phase two. around 600 healthy subjects

which should start very soon. the u.s. has just given us the green light. we said this morning that we are finalizing the protocols for phase three which is the last clinical study. which we are hoping to start in july of this year. the study would be several thousand healthy subjects across many countries. we are finalizing it as we speak. we are hoping people can stop in enrolling all those people in the study. getting a good sense of the efficacy of the vaccine and commission approval. how manyms of data, doses does it look like the drug will need to be used in? theerms of antibodies,

levels that regulators are looking for to establish benchmarks of success, what would you want those to be in the u.s.? in this morning's tried in phase one doses. i when youphase tried to get the best response. we are pleased to report we have two. three weeks apart. it is still a small study. the core participants of the 25 microgram and one other show they were having antibodies in the blood coming from vaccination. of people who are the

infected. how much antibodies the you need. we are excited about the data. guy: i have a couple of questions the follow-up. the first one is, when people do theyd-19 naturally, have immunity once they have had it? who are producing more antibodies in a natural response i'm wondering if it is a longevity issue. if you are producing greater amounts of antibodies with your therapy, do i get longer immunity that i what if i actually had covid-19? stephane: that's what we believe. i want to be careful because you can recall from the virus, we are still learning a lot about this virus. i think all of us have to be very cautious about statements we make around the understanding of the virus. we believe you are able to boost your immune system to a high

level, that would put pressure on the blood of people which should be very helpful. we have just finished a phase two study in coronavirus. it is a very nasty virus, especially for a woman bearing a child, if a woman gets infected, she can lose her child or very bad birth defects on the tile. birthmber one cause of defects in the europe or u.s. study wehown in the to around 10oost times higher antibodies of people who have been exposed to the virus. even people who have been exposed, they will boost the antibodies to provide stronger immunity. that is why we are optimistic. shery: for more on the potential vaccine from moderna, let's turn

to max. great to have you with us. we continue to see this race to develop a vaccine. italready had china saying may develop the vaccine and it will make it universally available. all these different research and different places, how soon could we see a vaxccine ready for mass production? max: it is likely to be a pretty substantial weight unfortunately. there are some things you can speed up. the fact that moderna has human data within five months of starting work on a vaccine, it looks incredibly impressive. in order to feel comfortable giving something to a really large population of healthy people, you need to have a much bigger data set of efficacy and safety data. larges going to take that thousands of persons trial for

any others. you really do have to make that high safety bar. since these are all vaccine projects that are happening more rapidly than any in history, we really do want to be on the cautious side when it comes to assessing whether they work or not. this early piece of data is certainly positive and what you would like to see. it is still a really small number of patients and not actually an indication that those antibody levels you are seeing are actually protective. that is something you need to establish in the real world. as we see this race continue between different countries, the first to fight and get away vaccine into production. there is increasing concerns about this idea of vaccine nationalism and the ability of the drug once it is approved and

put into production. max: i think you really are starting to see that. it was good to see china at least make an indication that it is going to try to avoid that but inevitably, there is going to be a lot of competition over a fundamentally limited supply unless people are right very early on about what vaccine is most effective and built in the norma's amount of manufacturing capacity. more likely at the end of the day, it is not going to be a single vaccine. it'll have to be multiple vaccines produced in multiple different places in order to meet the challenge of inoculating not just individual countries but billions of people. hopefully, there's an effort to have a great deal of international cooperation and any licensed vaccines two countries and build a large manufacturing base as early as possible so we are not having to

have to ask questions about who gets the vaccine first. it is widely available. shery: meantime, we are seeing more economies easing restrictions. this is what the former assistant assistant secretary for help on obama administration had to say about testing and contact tracing. reopening the economies in the u.s. take a listen first. naturaled much more coordination on contact tracing which is a patchwork of efforts across different states. also, much more coordination about having enough ppe for the fall, especially since the seasonal flu will begin then as well. shery: how much are we seeing in terms of the federal level in efforts to test and contact tracing the u.s.? max: it has been pretty spotty.

there really hasn't been a concerted federal leadership and willingness to kind of take on the front of a national testing and tracing strategy. the strategy such as it is has mostly been to leave it to states. providing some support but not at the level you would like to see to have really ambitious and really effective contact tracing. we will see how important that is. the very recent example of south korea that had little pop-ups of an outbreak. but tens oftrolled thousands of tests based on contact tracing efforts. there was nowhere in the u.s. that has that sort of capability yet. it will take a long time to develop. each state is left up to their own devices. haidi: thank you so much for joining us, max neeson with the

latest. lots more to come. this is bloomberg. ♪

shery: red flags and the structured credit market. loan obligations have begun to rebound from the worst performance since the financial crisis. sophie kamaruddin has been

tracking this. what are we seeing in this almost $700 billion market? sophie: taking a look at what the outlook is. managers are looking to july when payments would be due for most and there's a chance that more will reach key compliance tests given that patrick's have turned ugly and market to market risks are being weighed. with that backdrop. , more than 1000 have been placed on ratings watch negative. portfolio managers have been under pressure with few escaping relatively unscathed in the first quarter. suffering off of along risks as the weight of downgrade created stress in the bond market pending eight damper on prices as well as deals. switching the board, there has been a rebound since the march low. notes are trading just above $.70 on the dollar. lagging aaa securities and upside may be capped but so much

uncertainty still clouding across industries and keeping solvency issues front and center. some investors are positioning for opportunities to identify clo's that may recover and we will get better visibility for that. in the meantime, switching the board, there has been a slow recovery in leveraged loan prices as policymakers have opened up funding channels. as you can see, we are still up. i want to highlight there has been a pickup in the new issue market in recent weeks. among managers that have priced so-called no deals which are made up mostly of leveraged loans but at depressed levels. they have been able to avoid warehousing risks. our next guest says investment opportunities are attractive but not without risk.

layla. us from l.a. is great to have you. given the further downgrades in the months to come, is it too much risk in terms of how attractive you have seen this market at the moment? >> no, we are finding there's a lot of opportunities in the market. recover fore prices the aaa, aa and single-a rated, what you certainly highlighted in the index is that we are seeing the lower rated tranches are pricing in this unknown level of default that could be coming through the leverage bond market as a result of covid-19 and the impact on the economy. we are seeing around a quarter of the leverage loan market that has seen downgrades since february. how much more further do you expect that to run? laila: we do think it is going

to be increasing in the course of the next few months as the situation becomes a little more clear. rating agencies have been cautious in their approach to downgrading leveraged loans. this has a lot of merit. they received a lot of negative fit back that they acted too slowly. this time around, as with so many different things in the market, rating agencies decided to act with a great degree of speed. taking a look at impacted industries such as retail and travel, gaming, anything associated with leisure. all of these industries certainly need to be negatively impacted. the question is how much? the rating agencies have gone up and downgraded a proximally a quarter of the leverage loan and that could go higher. what we really need to find out

is what kind of liquidity companies have had availed themselves either through government programs in the market in order to see them to the other side? what this has done is it has downgraded significant portion of the leverage loan market and most boringly for clo's comment has downgraded to approximately 8% of the leverage loan market that we have 12% of the leverage loan market rated triple c. the impact is quite considerable so we have to pass certain performance test to be actively managed in a way that would be part of equity investors. shery: how different is the situation now from the financial crisis? back in 2008, we saw clo's coming out largely unscathed. laila: they did. the reality is from the historical performance, it is absolutely remarkable. if you do take a look and say that moody's has been rating

clo's for a long time. the lossa look at history since 1993, we have seen no aaa or aa ever suffer a default. i think that is rather extraordinary. you cannot say that about aaa or aa rated corporate debt. we look at the clo market and we really do find it is priced structurally robust. what we have found is there are two things that have improved. number one, we have increased levels of coordination for all debt try to. clo's even stronger than they were before. the second thing is actually due to in large part to the volcker rule. clo's are now back to 100% by leveraged loans. -- a portion of the collateral which was high-yield owned by collateral. historically, high-yield has exhibited lower levels of

recovery when they do default. we have two things we believe makes clo stronger today. one is the structural enhancement and two is the collateral that is backing clo's. we think certainly when you take a look at clo's, not only do we believe they are money good and .aa, aa, single-a we come down to the triple be, we think those are all money good. when we get down to low investment grade, this is where it is important to be able to understand the underlying credits of the portfolio and that is where analysis may brings the most benefit to investors in this kind of market. really appreciate your time. pine ridge investments md laila. -- major trading

partners escalate. we have the latest. this is bloomberg. ♪

haidi: beijing has followed impose on its threat to tariffs on australian barley

imports 80% for the next five years. tensions have been escalating. more details on what the fallout is particularly in the context of what we are seeing with the who. let's get you up-to-date with some of the latest business flash headlines in this hour. softbank vision fund lost over $18 billion last fiscal year, bringing down the value of investments including wework and uber. masayoshi son's conglomerate put an operating loss of $13 billion. the vision fund has been dragged down by uber's disappointing ipo work's implosion. hertz has named a new ceo in efforts to order off bankruptcy. work's implosion. the american car rental operation set it will follow immediately the resignation of the current ceo. hertz has until friday to restructure lease payments if it is to continue with the growing concern.

china has followed through on these threats of barley tariffs. 80% for the next five years in australian barley. tensions have been steadily building. paul allen is in sydney with the story. the last time we focus -- spoke about this, we were still waiting for a response from beijing. what are we hearing now? paul: the trade minister heard about this the same way everyone else heard about it which was a two paragraph statement that came from china's ministry of commerce. anti-dumping duty of 73.6% and anti-subsidy duty up 6.9% on australian barley that allows for five years and will come into effect today and china saying that complaint an 18 month investigation and makes no connection at all to australia's push for independent coronavirus inquiry which now has the backing of 120 other countries.

for australian barley exports about $900 million back in 2017. china being the biggest market by far. australia does not have any too many alternative markets especially not that much barley. china in the meantime has plenty of alternatives to buy from. the next step is going to be in appeal to the wto. shery: the list of potential buyers for version australia is narrowing. who is still in the race? paul: officially from administrators of deloitte, there is a small list they will discuss. a small number of very well-funded parties with strong aviation credentials. unofficially, we had a report from one of the local newspapers , the australian financial review, that bain capital, u.s. aviation indigo partners -- the

short list of fitters. notable absentees, the queensland government, the iron ore magnate, and brookfield has also said to be unhappy with the process. interglobe holds the largest taken india's indigo airlines not on the list. the next round will start next week and we should have final provision due on june 12. shery: paul allen the latest from sydney. we have a major interview coming up later today. the malaysian opposition leader joins us exclusively at 1:30 p.m. in sydney, 11:30 a.m. in hong kong. that is 11:30 p.m. in new york. don't miss it. we will have plenty more to come on daybreak: asia, including the chairman of the federation of hong kong industries and exclusive interview. plus, sarah tan. daybreak: asia is ahead.

this is bloomberg. ♪

haidi: a very good morning. i am haidi stroud-watts in sydney. we are counting you down to the start of trading. shery: welcome to "daybreak asia ." asian markets set to rise amid positive signs for an experimental vaccine. oil rises to pre-lockdown levels with china's demand all but recovered. softbank loses aliens of start up --