haidi: a very good morning. we are counting you down to asia's major market open. shery: welcome to "daybreak asia ." u.s. futures fall as violence rages on across the united states. the outpouring of anger they threatened a post-virus recovery. asian markets enter the second half in uncertain mood. the protest adds to geopolitical tension.

potentialens any optimism. president trump says there is no reason to maintain the city's special trading status. china says washington's campaign is bound to fail. thei: let's take a look at markets. it is an uncertain start to the trading week. u.s. futures continuing to fall. s&p futures down by about .7% after four days of gains. the u.s. markets buying into this reopening. as we speak we are continuing to see these protests intensify across major cities in the u.s. chicago just announcing closure of its rail and bar services, as many services -- cities across the nation are putting in curfews to curb the protests. we are continuing to monitor that as a major risk. nikkei futures at the moment,

seeing downside when it comes to trading in chicago. a little upside when it comes to singapore and osaka exchange, contrast to japanese futures. also watching kospi futures. in terms of the opening in australia, looking lower when it comes to the asx after that market fell by the most in about two weeks on friday. just a quick note, we have new zealand closed for the queen's birthday. the chinese and hong kong governments are pushing back against the united states after president trump said he would remove special trading privileges the u.s. gives to hong kong. areing says trump's actions doomed to fail and hong kong says it is not worried about using the favorable trade rules. stephen engle is taking a closer look. how is this all shaking out? a weekend toad see how the ripple effects will affect hong kong's role as an international hub.

hong kong government putting out a 949 word statement they are not unduly worried about the trade benefits being removed as well as the sanctions announced by trump on friday. with the hong kong government is saying is probably the most important and most interesting. because we are getting lots of different statements from chinese state media and chinese officials using terminology like doomed to fail, and u.s. double standards. what the hong kong government has to say is very important because perhaps they have the most to lose, or eventually gain if you are on that side of the fence. this is what the hong kong government said. we note with deep regret that president trump and his ministration continue to smear and demonize the legitimate rights and duty of our sovereign to safeguard the hong kong region. that is the statement from the hong kong government, not beijing. it is interesting, the financial

secretary gave an interview to mainland media, the global times, and he insisted the actions by trump would have little impact on the city's economy. he cited the fact that the hong kong economy is now more dominated by the services sector, not necessarily manufacturing. much of hong kong's exports are re-exports from elsewhere. but you can still not discount the fact that there is a confidence hit to hong kong. there has been a number of inquiries about immigration, property and migration, global home in hong kong. immigration requests have swelled 20 fold recently. most inquiries about possible immigration to taiwan and europe. again, over decisions like the american chamber of commerce in hong kong says retaining top talent, if people are going to be emigrating, they become more difficult. that could erode hong kong's attractiveness to multinational companies. we are just getting the initial days of reaction, but both

sides, all sides are trying to spin it their way. shery: we are seeing plenty of rhetoric. secretary of state mike pompeo doubling down. president trump doubling down on criticism of beijing. but whatever really seen in terms of concrete measures against china? stephen: that is true, because the statement was full of bluster on friday from donald trump but not a lot of specifics. what we know from mike pompeo on the sunday talk shows, he said donald trump has ordered a review of all the privileges that the united states bestows on hong kong, and then begin the work to eliminate them. of course these trade policies and benefits are under the u.s. hong kong policy act of 1992, where the u.s. treats hong kong differently than hong kong china in trade, commerce, and other areas. it is not just about the trade benefits. there are a lot of different

agreements between china and the u.s., including an extradition treaty, more favorable visa policies than for mainland china. but mike pompeo was much more strident this sunday after trump announced on friday, saying the communist party of today is different than 10 years ago. it is bent on destroying western values, ideas, and democracy. he says if the chinese are going to treat hong kong the same way they treat high -- mainland china, there is no way for the u.s. to treat it differently as well, referring to the national security legislation that will soon be imposed on hong kong. shery: stephen engle in hong kong. let's not get to karina mitchell with the first word headlines. outbreaks sparked by the death of george floyd erected from coast-to-coast, initially in minneapolis, spreading everywhere. president trump has granted the

protesters as anarchists, and has threatened to send in the military. china's factory output slipped last month, underlining the fragile case of the coronavirus lockdown any first quarter. it fell a worse than expected 50.6 in may, indicating it's faltering among continued weak global demand. targets -- banded has abandoned target. india is moving to a face lifting of the lockdown, despite continual record number of daily cases. places of worship, shopping malls will begin reopening next monday as a government attempts to reboot an economy that was already slowing. india has the most coronavirus inspections in asia, despite at last count an estimated 100 million people out of work. brazil has announced a record number of new virus cases and it

has overtaken france as the fourth worst hit nation for deaths. 30,000 withose by fatalities nearing 29,000. , divisions are emerging in the ruling coalition. lawmakers approved a plan, but opposition for stronger oversight was there. 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'm karina mitchell. this is bloomberg. ahead, as we see these violent protests continue across the u.s., some say president trump's comments have done more hurt than help. we will get the latest from washington. coming up next, we will be speaking to sarah hunter about the pmi speakers out of china, and a big week ahead for australia. this is bloomberg. ♪ this is bloomberg. ♪

haidi: kkr says stocks are likely to appreciate more slowly over the next 12 to 18 months ahead of allocation. the fed stimulus is working, but the conversations about debt levels will be needed. >> it is improving. we track data, we have 175 companies globally and operate in over 25 options globally. data is improving, led most by china. ultimately, and it is important for investors to know, markets are discounting mechanisms. so they are looking towards that improvement. we have seen that in terms of some of the earnings revisions turning up. you have seen consumption start to improve. that is all good news and ultimately we are looking for

more than 10 million americans to come back to work by the end of the year. the bad news unfortunately is that the rate of change will start to slow and we are probably going to be in a fairly slower growth environment. they will be destruction of demand that does not return. and i think right now, what we think the markets are saying on the credit side, they are discounting and a 9% default rate, and it will probably be around 8%. market was discounting it about 14%. equities, what the market seems to be saying is that the multiple should be back to pre-coronavirus levels and that in terms of demand destruction, we will only lose about 5% of total demand. we think the number is probably closer to 10%. i think equities are right to rally on the fiscal stimulus. they have been right to rally on the monetary stimulus. i think from here we probably

appreciate a much more measured pace and what will be the most important is getting the trends and the themes right. because there will be some businesses that have bad is this firmst don't work, some will help prepare those. then there will be some that do not need any capital. this is an accelerant to what they were already doing well. reporter: people are asking themselves, can central banks, the fed chief among them, put a floor under the market indefinitely? which is to say every time investors through a tantrum there is more stimulus coming, more liquidity coming. in your mind is there a limit come and if there is a limit, where and when is it as best as you can guess? henry: i think there is a limit. near term we are seeing a shock and all campaign.

-- and awe campaign. 35% andmewhere between 45% gdp which are extraordinary members. -- numbers. there is nothing like that we have seen. what will change investor sentiment around that is a couple things. one is that money is not free, even though we have really low rates. ultimately there will be some tax-equivalent or some slower growth because of higher debt levels. and that will affect the rate of growth in terms of how personal incomes grow. so that is probably the phase we will enter in 2021. the other thing which you and i have talked about is if there is some tipping point on debt levels for governments. our work shows about 150% of gdp. and we are getting closer to those levels. i do not think we are sowing -- it because they are

being overrun by central banks. ultimately the liquidity ticket will turn off probably by 2021. the fed andkkr is the ecb have done an extraordinary job. when you look at the data that just came out that bloomberg reported on, you showed that personal income actually grew 11%. that is an incredible number. that is all the cares act. the estimate was -6%. at the same time actual spending was down about 11%. income that came into consumers in america this past month was from the government. that is an extraordinary amount. so the cares act, what has happened has really been a massive buffer. as we get to the second half of the year into 2021, i do not think that you can continue to do this indefinitely. i think that is why you are seeing a bit of a pivot in d.c. and other areas to open up the

economy, even though you are not seeing the rate of new cases decline the way some would want. kkr's henry mcveigh speaking exclusively to bloomberg. has performedi continued recovery but not without challenges. shery: let's bring in sarah hunter joining us from sydney. this gtv chart on the bloomberg showing the numbers we got. the official pmi numbers out of china. it was sort of a mixed picture. worse than expected when it comes to manufacturing numbers but business sentiment it seems high. we are expecting the export-oriented numbers. give us your assessment of what these numbers are telling us. sarah: i think what we are generally seeing out of china and this data probably confirms

it is something of a patchy recovery. we have seen a rebound in industrial production and other hard production measures. iron ore prices have been boosted recently while expectations for additional stimulus infrastructure spending and that sort of thing. has been weaker and of course the export side as well definitely struggled to bounce. not surprising given the position of the global economy. but it does really highlight that despite the fact china's economy is more domestic we focus than it was through the financial crisis and afterwards. it is still reliant on the international economy. it will be heart for china to fully return to normal. a mixed picture amid some good news but also highlighting some of the challenges ahead not just for china, but the world overall. shery: so where will all the

manufactured products from china go? we are seeing a rebound in manufacturing and production but not really a demand to take all of it in. sarah: i think there is a timing issue here. you kind of have to remember what the pmi is capturing. in some regards it is a crude survey. really just asking businesses are you doing better than you were last month. not surprising the majority of businesses reported that. it immediately came out of lockdown, we saw a sharp bounce back. if you ask businesses if you are doing better than last month, when last month they were doing nothing, it is not hard to say yes. up.ould just be catching -- it seems we might have

lost sarah hunter, oxford economic. we will try to get her back if possible. in the meantime we are going to take a closer look at president trump's reaction to the protests raging across parts of america. we will get the latest from washington, next. this is bloomberg. ♪ s is bloomberg. ♪

shery: cities in the u.s. are reeling after the police killing of george floyd that threatens the post-virus recovery. .os krasny has the latest the u.s. finally reopening its economy, though gradually, just to be facing mass protests. how bad is the situation? it really seems like civil

unrest boiled over this weekend. in much more places than we have seen. previous ones were more localized. this is now in over 100 cities small and large. people have been very tense and on edge, and it really boiled over. time and again we have seen these are peaceful protests that suddenly turned violent. there is some kind of trigger in there. setting fires to cars, looting, it's all happening. really something that unnerved the country we have not seen in a long time. -- the country in a way that we have not seen in a long time. criticismre has been

that what we have heard from the president has added fuel to the fire. what do you expect the next move to be from the ministration? ros: we have certainly heard some criticism from our big-city mayors and others of trump's inflammatory rhetoric on twitter and some of his actual speeches. it's possible the president will go some kind of speech to try and diffuse the situation, or to really take a close look at race relations in the united states. but it is unclear whether he actually will do that. some mayors, like the mayor of washington dc, would probably hope he does not do that. at the moment trump is very much focused on the law & order aspect of all of this. he tweeted those very words earlier. he gave a speech on saturday about how we are not going to let mobs and riots take over. today he took action via the

justice department to classify antifa, which is a loose affiliation of anti-fascist protesters, as a terrorist organization. he actually cannot do that. antifa does not really exist as a complete entity, a group of people. but he's taking a hard line. returns trump to the themes of his 2016 convention speech in his inauguration speech, that this is a dark and dangerous america. so really for president trump, this could be what he sees in his mind as i win -- as a win, by focusing on law & order and having the spotlight taken away from the coronavirus pandemic. shery: president trump also focusing on what he calls on a tweet this weekend, liberal u.s. governors and mayors getting tougher on protesters, or else

the federal government will step in. what are we seeing in terms of divisions within the american public and american society at large? right. well, americans at the moment have been very split along partisan lines for a long time. and it's an easy target, i would say, for president trump to look at big-city mayors, who are almost inevitably democrats, governors like the governor of minnesota, saying they are just weak, and talking about the possibility of sending in the u.s. military to straighten things out. he cannot do that at this point. but the national guard is operating in something like 15 states at the moment. 5000 troops with more on hand. for the most part, they are not

armed, they are just there to supplement law enforcement. very volatile situation. are continuing to hear from major cities announcing curfews. takecounty curfew will now place from 6:00 p.m. sunday until 6:00 a.m. monday morning. we are carrying -- we are hearing reports of train and rail services being stopped in chicago for that same reason. does this mean for the u.s. consumer as well as the logistics for businesses, specifically services and consumer-saving -- consumer businesses that are just thinking about getting back to normal? ros: absolutely true. we have heard reports this week about apple closing a number of stores, closing a number of stores really across the

country. outlets thatail only just started to reopen in many cases after the coronavirus. some of them are still subject to social distancing procedures, so you can only have a limited amount of people in the store. between that and looting and protesting, it seems the safest thing for now is to close them down. as you said, in chicago the public transport has been shut overnight. it's not just downtown. i've heard reports of some suburbs of chicago seeing l ooting and unrest. it's really quite a big situation. the best you can help is that it blows over soon, but i think you are seeing in the stock market, uncertainty. that is what they are seeing now. ros krasny with the

latest. coming up next, we will be hearing from the cleveland fed voice. this is bloomberg. ♪ staying connected your way is easier than ever.

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shery: let's bring back the chief australian economist, sarah hunter, who joins us from sydney. thank you so much for hanging around. let's continue our conversation on consumption, not only in china, but locally, given we have seen this rebound in manufacturing and production in china. will there be enough demand to take all of these up around the world? will we see price cuts adding up? yes, i mean, that is the major risk, and in terms of looking at the outlook, we certainly think that there is -- the demand is very weak at the

moment and that does tend to suggest we are going to see deflationary pressure rather than inflationary pressure as we move through the near term. we are seeing it come through in other countries. government supported income is very helpful, but it is certainly being hampered, not just on services, where lockdown restrictions are preventing that activity. it's also costs goods closing -- across goods closing and other retail like that. of a is a significant risk lack of demand weighing on the global economy. the is really what hampered speed of recovery in the second half of this year, and into 2021. what is a risk, as we continue to talk about the resumption of economic activity, that what we are seeing is a deflationary recovery not just in china but to be replicated elsewhere in the sense that you might see supply-side

normalization but the demand side is going to take a long time, if ever, to return to pre-covid levels? think that certainly, for us, that is the major risk we are looking at around the inflationary environment. somew there's been suggestions and some commentators saying supply chain disruptions may create inflationary pressures. that is possible in certain small pockets of the supply chain. for products that have perhaps benefited from the structural shifts we are seeing as a result of the pandemic. very small examples around hand sanitizer and other chemical products, but generally speaking, demand is very weak at the moment. -- foreak for consumers consumers and businesses as well as. this is not an environment businesses want to be investing in. constructing new production

blocks,es, office factories, what have you, that is likely to remain pretty subdued in the near term. you put all of that together and it is a very weak demand environment globally and we are seeing signs of that across-the-board and in all the high-frequency indicators we get, and that then will weigh on the available level of output and given the supply-side capacity will be there, that does create deflationary pressures, and that is the key challenge for policy. whichthe environment morphs from being a temporary depression in demand into a permanent depression in demand that leads to supply-side adjustments to contract production and moving towards that more l-shaped recovery rather than the very optimistic view of a more u-shaped to cover new -- u-shaped recovery.

fiscal policy is so effective in this environment. much more effective than monetary policy. there can be a direct boost to can return tovity normal. the key question is driving demand so it does return to normal. we are seeing that awakening from hibernation, as the australian government has called it. we have seenicy, australia get through this seemingly with the infection curve not as bad as elsewhere. the economic indicators generally not as bad as what we have been bracing for. is there a chance that we could actually escape the recession? soah: it is a good question, in terms of the technical definition of a recession, two quarters of negative growth, it

is not completely out of the question, although i would say it is pretty unlikely. essentially, we will find out this week because we get the q1 data on wednesday. the national accounts data for the first three months of the year. the discussion is kind of key number. the second quarter will undoubtedly be negative. there is no way of avoiding that given the impact of the lockdown measures. we can see how much output fell in april and in may and there's no way that the economy -- the first three months of the year, it is possible. there is a lot of negatives. negatives around discretionary retail and services, lockdown wear tight measures were starting to be introduced from the march onward. there were some positives. we know that the retail numbers were very positive because of stockpiling, and there's potential that inventories come through quite positive because

firms were planning for a different environment from the when they were facing, particularly towards the end of the quarter and then exports as well likely to be supported for growth. we find that out tomorrow but we know that commodities held up reasonably well. unsurprising given what was happening. impossible. i would say it is pretty unlikely, but more broadly, that is a technical definition for recession. i do not think we want to keep characterizing what is happening right now as anything other than a very severe economic downturn and that is what we have got to fight. even if we do by an absolute fluke end up not seeing a negative growth in the first three months of the year, that is really a statistical artifact. it does not change the environment. it will be very challenging going forward. there is a substantial amount of dislocation in the economy and the labor market and that is what we have to fight. technical definitions are one

thing but what is actually happening on the ground is what really matters and the economy is clearly in a very difficult place, albeit less difficult potentially than other developed economies that have suffered more from the pandemic. certainly does not change the almost 600,000 jobs lost in april alone. we -- thank you so much for joining us. sarah hunter with us. yield curvees and control continue to be the redlines u.s. policymakers are unlikely to cross when they meet next week. the writer mester told us what the fed can do as the fallout of the economic damage now emerges. >> second-quarter numbers when they come out are going to be very, very negative numbers. we know that. we know that that was the height of the shutdown when there was no activity. going to see activity begin to emerge.

some of the quarterly growth rates are going to overstate what it looks like out in the field because we are going to see from a base of very little activity some pickup in activity. we are going to be below where we were at the start of the year in terms of both employment and output. when you have so many people out of work, it is hard to imagine that we would see a quick v-shaped recovery. i think it is going to be slow. i think businesses are going to be thoughtful about reopening. i think people are going to be thoughtful about spending, so what that means is that monetary policy has a role to play as we support the economy getting back andhe goals of employment price stability. that is a more traditional monetary policy, and the tools we have our the interest rate guidance, has forward which we have used before, and also, asset purchases, but asset purchases, they support

the economy as it moves forward towards a full employment and price stability. >> at the moment, there are people worried about how big the fed's role is in clearing markets and how big defense role is in setting prices and it has been a conversation the past several weeks with us and your colleagues about yield curve control. i want to try and understand from you because this is where the confusion is on wall street for some people on fixed income at the moment. would yield curve control be something focused on the front end or what you think about doing what japan is doing, which is all the way out to 10 years? how much control over the yield curve would you be looking to have? >> my view of yield curve control is that it really is support for forward guidance. as many have discussed, yield curve control is a tool. back in 2010, during the financial crisis, and then also as part of our review, a tool --

potential tool. no decisions have been made on that at all. again, i don't think of that as something that would be in this phase of what we are doing to make sure the markets continue to function, but as a tool, it is worthwhile thinking about what those tools are going to be that we can use. as a discussion for viewuture phase and my own is that if you wanted to do it, you would have to think hard about how you would implement it, and as i said before, how do you exit from it. with any of these tools, there are pros and cons of using them. right now, you know, as you point out, the yield curve is very flat at the short end, so maybe with the guidance we have given already, it is not necessary to do something to emphasize that forward guidance but i do not want to take it off the table as something that is the potential for me to think about as a possible tool. i do not see that we needed here in this phase nor do i see going forward that we necessarily .ould need to use it

but if we were to use it, i would view it as a reinforcement for forward guidance on the short end. go, therewe let you is the possibility we could end up in a new trade war with china and additional tariffs going on. how would that affect the economy? have we already absorb that or would that be a new hit to the economy now? >> whenever there is a new rising up of uncertainty, and this is another uncertainty, we have to take it on board of being another potential headwinds to a recovery. i think we have to just use that -- we have to take the conditions as they are. i think that we played this game before and sort of saw how the the expansiond earlier, so i think we have to just take that on board. this is another uncertainty added to an incredible amount of uncertainty we already have.

that was the cleveland fed president, loretta mester, speaking to us earlier. announcednext, india plans to ease its strict virus lockdown even as infections continue to surge. in australia, more restrictions are lifted this week. this is bloomberg. ♪

>> welcome to daybreak asia. live pictures out of washington, d.c. this would be the third day of protests in the u.s. capital. this over the police killing of george floyd. we have seen thousands of people in the last few days marching across the white house. we have seen these protests going from being very peaceful to even violent. not only here in washington, d.c., but from new york, to chicago, to los angeles. some of the violent protests really leaving behind burnt out police cars, damaged property. we have seen some reading and violent arrest as well. several mayors have imposed curfews as well. chicago, for example, suspending bus and rail service from 6:30 p.m. today to monday in the morning. now, this of course as the u.s.

economy was slowly starting to reopen after the coronavirus related lockdowns. now, we are seeing potentially more risks of infection. government officials, from governors to mayors, have been concerned and have waste concerns at the protest could actually spur new outbreaks in the united states. of course, a coronavirus outbreak has already killed more than 100,000 people in the united states, this as you see the latest protests in washington, d.c. in asia aretries further easing virus measures this week after months of lockdown. joining us for more, sophie kamaruddin in hong kong. i just mentioned how the u.s. was starting to reopen its economy. what are we seeing around the world? thisarting with australia, monday, more businesses will be allowed to reopen in the two most populous states as part of

a three stage plan. the state of emergency has been extended until june 21 to give health authorities the means to enforce rules. turning to southeast asia and indonesia, 102 designated green sounds have been given the nod to resume activity as well as to hold religious gatherings as they show progress with declining infections and fatalities and singapore starts its phase reopening on tuesday. this month, essential travel will be allowed to and from six provinces and municipalities in china including shanghai and the lion city. paris curbs will be ease further but not fully lifted in the manila metro area and three surrounding regions with millions of jobless from the three-month shutdown. they are launching a program to incentivize people to move from the city to the countryside. now to india, the country did phase four of the

lockdown. sunday was the biggest jump on record. place until is in june 30, including 13 cities. mumbai accounts for nearly one quarter of india's deaths at 150 cases. rules will be relaxed from june 1 elsewhere, starting with places of worship. wha are struggling with the second wave concerns? sophie: speaking of areas which are dealing with second wave infections here in hong kong, the 16 day streak of no local infections came to an end with the city reporting its first such case in two weeks. a warehouse employee tested positive on sunday along with her husband and her colleagues are now to be placed under quarantine. hong kong authorities will likely want to avoid what has happened in south korea, where cases linked to a logistics

center have risen to at least 111. they scrambled to test over 4000 known contacts. as career ramps up recovery efforts, the guy from an -- the itsrnment is set to submit budget to parliament. concerns.second wave authorities have nearly completed a mass testing campaign that began on may 13, mobilizing thousands to do so. since then, nearly all 11 million residents in wuhan have been tested, with local authorities reporting only one new case in that time. sophie kamaruddin in hong kong with the latest. coming up next, we will be discussing the outlook for rate luxury real estate -- for luxury real estate. the founder tells us where chinese buyers are still putting their money. this is bloomberg. ♪

haidi: the australian property sector has been reeling as the coronavirus pandemic triggered soaring unemployment, border closures, and social distancing measures. even so, the chinese real estate portal says interest in the australian market remains strong in the first quarter.

for example, -- from china fell 14% versus the 40% decline from domestic buyers. joining us now to discuss all of this is monica to -- monika tu. just in terms of your background for our viewers, i know you deal mostly with high net worth individuals from china wanting to purchase australian assets or to move in and work and do business -- end work and do business in australia. have you seen any change in demand, particularly as these chinese and australian tensions have escalated as well? monika: thank you so much for having me. we saw a lot of challenges in terms of real estate in general in australia because of lockdowns. we will have limited opportunities to have open houses. in terms of the informational bias, we will have a lot of

residency inly -- australia. they stay back from the chinese new year and could not leave the country. we did these extremely well, even during the pandemic. showings from mid-march into the beginning of may. we showed quite significant numbers, so icap it is probably just the nature of our business. in general, they were taking it really hard. there are chinese migrants in australia. it happens much faster. the other thing we have been talking a lot about is the kong.ainty in hong

traditionally, ultrahigh net worth chinese individuals would have had assets in hong kong. is that likely to change and do you expect to see some of that wealth to be diverted to markets like australia and new zealand, particularly as we see the appeal of australia and new zealand having handled the coronavirus better than a lot of other places around the world? monika: i really believe australia has done an amazing job. hong kong or singapore. fromve more inquiries regions. -- safe haven. -- come back from australia -- to australia from hong kong and china. we see that the demand is literally increasing. to seewe are continuing

tensions rise between china and australia. this is not the first time that haveappened, so when we heightened tensions between the two countries, how does that affect these chinese residents in australia? do they continue investing in the property markets or do they become a little bit more cautious? monika: i would say, you know, because we are dealing with home bias. -- previouslye looking for investment opportunities. buy a homeople can for themselves or their families. definitely will be some effect in terms of business investments, but for the home buyer, it has become much easier for residents here. shery: where are they buying? i am in sydney.

, forve you a quick example the last three months, we had only about six transactions. 7.2 5 million to 19.48 million, north shores in sydney, prestige properties. what about the other aspect of your business in terms of the hr and recruitment side? have you seen any kind of impact from the virus and the lockdowns on that side either? provide a concierge service. all the migrant children to look for opportunities. we have increased -- increasing demand for that. previously, we set our migrants

-- 45 to 75. a lot of them have business in china. even though they have a family, the husband travels backwards and forwards. recently, we saw a lot of people actually having their children here in australia. were looking for jobs. it's really helpful. take a look at what the markets are doing right now. downside pressure. we get the latest japan numbers when it comes to first quarter capital spending, rising 4.3% year on year. instead of falling and plunging 5% as expected, profits falling for businesses in japan. 32% year on year. markets very costed and careful -- cautious and careful as protests continue from chicago to new york. we will be watching all

developments closely. we will have more on "daybreak asia" next. this is bloomberg. ♪

haidi: good evening from bloomberg's global headquarters in new york. i am shery ahn. haidi: and i am howey stroud-watts -- haidi stroud-watts in sydney. welcome to "daybreak asia." our top stories this hour, u.s. futures fall. the outpouring of anger may threaten the post-virus recovery that was already fraught with risk. asian markets enter the second half in an uncertain move. the protests adding to geopolitical tensions and the

coronavirus upheaval and threaten any potential investor of optimism. the u.s. puts hong kong's future in question, saying there is no reason to maintain the city's special trading status. beijing says washington's campaign is bound to fail. shery: breaking news out of south korea. we are getting the trade numbers out of the global bellwether when it comes to these trade numbers for the month of may. exports year on year plunging 23.7%. a smaller plunge than expected. we are still talking about a double-digit plunge following those declines of 24% in the month of april. this will be the second largest drop since the global financial crisis. also when it comes to imports, a plunge of 21.1%. again, worse than expected. worse than the month of april as well, and given the larger than expected fall in imports, we are seeing the trade balance staying at a surplus instead of going

into deficit. 436 million dollars surplus for south korea. again, exports plunging for a third consecutive month and a double-digit plunge of 23.7 percent year on year. month of falls for import numbers out of south korea. themuch when it comes to kospi, gaining .4%. the korean won is stronger against the u.s. dollar. we have seen a huge upside in south korean stocks. we are talking almost a 40% rally since the march low. we have heard of stimulus measures. thence ministers saying third extra budget bill is in parliament on june 4. there seeing an upside for nikkei while the topix is holding steady. we did get first quarter capital

spending numbers, which surprised to the upside, rising more than 4% year on year instead of a decline of more than 5% as was expected. the japanese yen strengthening 100it is now holding about 768 level. risk-off sentiment spreading. we have the ongoing protests in the u.s. but also escalating tensions between china and the u.s., haidi. just have some property market data coming out when it comes to australia. the corelogic home value index showing housing values did continue to edge lower in may although we are seeing transaction activity seeing a partial recovery from that sharp decline we had in april. the national index down .4% over the month. five out of eight capital city regions recording a fall in value so this is the first month on month decline since june last year since the pandemic lockdown

muted consumer confidence when its to play out comes to the housing market here for the month on month number, down about .5%. we are also taking a look at weakness when it when it comes to the housing market come start of trading here in australia. despite these expectations of fresh stimulus to boost a building agency. in terms of the stocks to watch, watching out for iron ore minors passed $100. they have reentered that race for virgin. shery: let's continue discussing the markets appeared our next guest see stock markets getting a bit top b. the head ofs is asia research for julius baer. great to have uss. as we were saying, it seems the markets continue to see some upside. we are talking about the s&p 500 and the u.s., a second month of gains. i mentioned the kospi up about 40% since its march low.

i don't understand why. as we just announced, the economic figures don't look too great when it comes to trade numbers out of south korea. we have the ongoing protests here in the u.s. which could threaten the economic recovery. so what is happening? >> well, there's so many moving parts, but i think the most important thing is the market is seeing people go back to work like that, and this has been happening in several countries for almost a month now. there's so far no big second wave, so i think the market is looking for waves coming back here and there, localized like what is happening in korea, and i will not be shocked to see them. there may be days where it goes down 1% to 2% on bad news but those will be outnumbered with people getting back to work. you have to remember that most of the people in the united states have done no spending in

the last couple of months. they have a lot of money in their pocket. the u.s. savings rates going up 30%. they have all the money in their bank accounts and they are going back to work. it is kind of a good situation. shery: we just saw the biggest drop on record in american consumer spending, and if we do have the riots ongoing, that is going to hurt consumer sentiment even more. we will that actually get spending once economies reopen, and can they even reopen if these protests cause a second wave of infection? mark: just to reiterate what i said, there is a lot of money in people's pockets precisely because they have not been able to spend. now, they will be able to. to soundots, i'm going very politically incorrect, but it is a mild positive for the market. market, it would not mind if

biden was president, but it would mind if the democrats got the house and the white house, and if there was a concern with the mismanagement of the virus, that it could the moving in that direction. and now, the people in the swing states, they are not exactly like you or me. swing voters in the midwest see their cities in the midwest in chaos. they do not like chaos. they are looking for strong leadership. they perceive that in the way the administration has been reacting to the riots. riotsdo think that these will probably peter out, i don't know, in about a week or less. it tends to be the trend. i don't think they will stop people from spending. haidi: we can always trust you to say something contrary like that. i am curious. the last time we spoke, you said the handling of the coronavirus could be a real risk for trump's

reelection prospects. the not least of which is the most at risk groups would be his base. we have 100,000 deaths. i think there is fear criticism as to how the administration handled the virus. a readynow kind of distraction in the sense that the protests across the country, the rhetoric that the white house has said is playing to his base? mark: yes, it is. i mean, i do not know that i can add to what has been said because i think it's perfect. the way the white house handled the virus was poor. with was a lot of fighting specialists like anthony fauci going off on tangents about chloroquine. kind of not showing who is in charge, so the governors turned out to be the leaders. they just started talking to each other. and that was the real risk. i think the market was starting to worry about the democrats sweeping the elections in november, but now, i think these

riots actually play into their republicans very well because basically, a lot of people see the democrats as being too soft, and they see the cities that they manage as being incompetent. how many detroit mayors have gone to jail for corruption? i think it is quite a large number. it is perhaps not the way you are our think -- would think, but the swing voters and midwestern cities see these dysfunctional cities being run by democrats. they do not like the democrats, and it probably feeds well into the republican side. i want to get your view when it comes to asia. you have also seen the dislocation between the eager data and what the markets are doing, and you say the market action is pretty top b. do you expect that to continue, particularly as these concerns for the recovery that we are seeing is really supply driven and it is essentially a

deflationary recovery? probably because there is not nearly as much testing in asia as there was in the west. we do not know the full extent of the virus, and of course, younger populations with stronger immune systems, with the exception of china and india, you did not see a terrible devastation on the level of the u.k. or italy or new york city here in asia, and so, there is a resumption inactivity. economies simply cannot stay shot for any longer than they have been, and so far, no big second waves. a little like the u.s., it feels tired to say this is wrong for the market to keep going up, but you have people going back to work. you have no big second waves, and you have got the governments and central banks being so supportive. i think they will probably follow the west, and there are a lot of stocks here in asia that

have not really recovered, that i think we'll play some kind of recovery rally over the next couple of months. seey: as we continue to tensions rise between the u.s. and china, would you entertain some tension related strategies? somese we have seen chinese stocks, miners of rare earth minerals, snapping back to life in may. mark: well, i think a bloomberg headline from saturday summed it up quite nicely. trump's china announcement leaves room to de-escalate tension. i think that is probably right. does the u.s. market care about it? no, look at the volatility. it has not spiked up. look at aussie dollar, japanese yen. metals have not gone down. metals are not going down. in asia, we think it is a big deal, but foreign policy just is not a big issue in the u.s. it is interesting to listen to, but if you make brian sell

recommendations based on these features, it has really been a disaster. the best thing is just not to listen to it. think back to 2019. the trade war was going full blast. the u.s. and chinese markets both produced extremely good returns, so they are going to separate. the u.s. and china are economies that are entangled. they will disentangle. it will take a long time. does that mean share prices are going to go down? i don't think so. if the u.s. does not want china to get all these cutting-edge chips, china will have to build its own. is that bad for china? no, it is good for their stock market. great to have you as always. head of asia research for julius baer with us. ,"ill ahead on "daybreak asia president trump says no more special treatment for hong kong. what that could mean politically, policy-wise, economically as well. guests next.

we are looking at live pictures of miami in the u.s. as we continue to see these protests take place across major cities, some of them turning violent. the united states seeing a sixth day of protests over the killing of george floyd, and we are seeing a number of cities putting in place these curfews, the stopping of rail and bus in chicago, l.a. county announcing a curfew starting at 6:00 p.m. on sunday going to 6:00 a.m. monday morning. really casting into doubt this nascent reopening economic recovery we are seeing in the united states. we will bring you the latest on these protests across the u.s., next. this is bloomberg. ♪

karina: you are watching "daybreak asia." president trump is stepping up his confrontation with china, vowing to end hong kong special trade status after beijing approved sweeping new security laws. legislators will review the links with the u.s. while chinese companies listed in new york will come under closer scrutiny. the president is denying access to chinese nationals deemed to be a threat to national security. pres. trump: china's latest incursion, along with other recent developments that degraded the territory's freedoms makes clear that hong kong is no longer sufficiently autonomous to warrant a special treatment that we have afforded the territory since the handover. replaced its promised formula of one country, two systems with one country, one system. gauge of china's factory output last month underlying the fragile pace of

recovery from the coronavirus lockdown in the first quarter. the official pmi fell to a worse than expected 50.6 in may, indicating the initial post pandemic rebound is sponsoring amid weak global demand and china has abandoned numerical growth targets as the pandemic and the trade war cripple overseas orders. meanwhile, india is moving to a phased lifting of its virus lockdown despite recording a record number of daily cases. shopping malls, restaurants, and places of worship will reopen next monday as the government attempts to reboot an economy that was already slowing. india has the most coronavirus infections in asia despite a lockdown. 100 million people thrown out of work. 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. shery. have hitolent protests america's largest cities. we take you to live pictures of miami, where we continue to see

the protests here and there. the violence of opting in the wake of the death of george floyd, a batman from minneapolis -- black man from minneapolis who died at the hands of a white police officer. flynn, this coming at a time when the u.s. economy was gradually starting to reopen, so how big of an impact will this have on the recovery? >> economists are very concerned at the timing of this. just as people were starting -- businesses were excited about adding people -- luring customers back, they were hammered in march and april. people who have any reason not to go out and spend money, for whatever reason, it is a serious concern. >> just give us an update as to

what you are seeing in chicago. we are seeing curfews being put in place. this is clearly going to be detrimental. just as the day-to-day operation of the potential reopening, correct? chicago, for instance, they were supposed to reopen -- start gradually reopening businesses on wednesday and the mayor announced that because of the violence last night, they are now rethinking matt, and they may have to -- they may have to postpone that reopening. especially in the central business district, looting and damaged property they have not seen since the 1968 riots after martin luther king's assassination. serious, there scope of it, much greater than the city has seen in years. there are millions of dollars of damage.

the shopping district in the the, and the city of -- central business district has essentially gone on lockdown. the mayor has cut off all public transportation downtown. only those people who work or live there can go, and so, i don't know if you can hear it. there are helicopters overhead. i live on the south side of the city, and protesters have moved into -- out into the neighborhoods because they cannot get to downtown. so far, protests in our neighborhood have been peaceful, but as you can see, police are being very aggressive, trying to curb any other damage to property. shery: what will this mean for local government coffers? we have seen the major budget impact the states and municipalities have taken because of the pandemic. now, you have extra police on the ground, security measures to be taken. what does it mean? goes on for any

period of time, it could be significant. as you said, the cities have been hammered by major budget tax from the loss of sales revenue. people are not going to restaurants and are not spending money. so that will be -- that will be significant hit if it continues for any period of time. in new york city, mayor de blasio this morning said he did not think it was -- it would threaten new york city's plan to reopen a week from monday, june 8. his hope is that the protests will have subsided by then, and he is expressing confidence that it will not -- it will not he said- as he put it, in terms of impact on our restart, i don't see an impact on our budget. nothing profound. that is again assuming that these protests do not continue.

thank you so much for joining us. flynn mcroberts in chicago, the latest on those ongoing protests in the u.s. coming up next, ready to roll. an exclusive look at the electric car market in china with the neo-chief executive, william lee. this is bloomberg. ♪

shery: william lee says the long-term growth potential of china's market remains in place despite months of declines and predictions of a 14% fall this year. let's get straight to selina wang, who spoke exclusively with the ceo. what else did you guys talk about? it has been ana: challenging year. the electric vehicle industry in

china, despite that backdrop -- sales have declined. they were under pressure even before the covid outbreak. they expect that to drop 14% according to bloomberg. at the same time, they are dealing with increased massive new -- shanghai plan around the year. of covid on his company's operation. covid-19 has greatly impacted our supply chain in china and overseas for the first quarter, especially in february and early march. our supply chain has been restored this late march and mostly back to normal on april. so far, supply chain and manufacturing are back to normal. in terms of demand, most offline businesses in china were closed in february and march but they

have started reopening in april. our sales orders will be back to pre-covid-19 levels in late april and the virus impact has been gradually eliminated. to the long run, the virus impact on the overall auto industry is quite big. >> do you have any estimates for this year's delivery and sale? we will not adjust the sales estimate we made earlier this year because of covid-19. as we have seen our orders continuously grow since april. so we are optimistic about our full-year sales estimate. our estimate for second quarter delivery would be 9500 to 10,000, which would be a record. we think the growth of our order should be sustainable as we will be delivering our new car, the ec six, and plan to deliver our new battery packs in the fourth

quarter and to the -- touring the battery as a service into reality in the second half of the year. last year's cash burn, that one billion-dollar investment, would only last less than a year. what is the long-term plan here when it comes to fundraising? of course, we may raise more capital, but overall, we think our capital is sufficient. you said on the earnings call that you could list the new china entity in mainland china. what are your plans about that? that? how soon could that actually happen? >> -- but we do not have a plan so far. but it is possible, if we want to do so. shery: coming up next, we will

numbers,ew of asia pmi so stay tuned. this is bloomberg. ♪ . this is bloomberg. ♪

."rina: this is "daybreak asia statesu.s., cities and are bracing for more protests after a weekend that recalled memories of unrest in the late 1960's. outbreak start -- sparked by the death of george floyd erupted from coast-to-coast, spreading from washington dc and new york to chicago and los angeles. president trump has branded the protesters as anarchist and has threatened to send in the military. brazil has announced a record number of new virus cases and has overtaken france as the fourth worst hit nation for deaths. fatalities are nearing 29,000.

thailand has backed a $60 billion virus package, but divisions are emerging in the ruling coalition. lawmakers approved the plan but two key coalition partners approved opposition plans. south korea posted another double digit decline. outbound shipments fell by 24% from a year earlier, fractionally better than expectations. korean exports serve as a barometer of global trade. a sharp decline in april and may has the -- the former prime minister of malaysia is fighting a dismissal from his own party after being removed with four other people for sitting with the opposition and parliament. he was the party leader when the decision was made last week. he resigned as prime minister in february, and has since been seeking a vote of no-confidence in the person who replaced him.

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'm karina mitchell. this is bloomberg. haidi: we have a slew of pmi data out in the last two minutes. south korea in particular, we see that manufacturing pmi continues to decline, falling to 41.3. reading, thel lowest since at least january of 2009. orders also fell to the lowest in 11 years. it is coming as a same time we have continued double digit decline when it comes to exports in may. that data out in the last hour showing shipments overseas fell 24% from a year earlier. we locked down as well as the demand side weakness continues to show across these numbers. pmi for manufacturing

for the month of may, that final number falling to 38.4. identical to the per luminary number. -- preliminary number. you look at the slew of pmi readings. is it showing us much of a recovery process at all? michelle: it is a lot to handle all at once but two things jumped out at me. south korea being the bellwether of global trade and a hopeful sign in some respects of electronics. not good numbers today from the pmi or the experts you reported earlier. it was an interesting reversal of a trend last month where north asia was looking less bad than the rest of southeast asia. southeast rager at record lows. this month we are seeing a little improvement for southeast asia, but north asia, down a tech. -- a tic.

so some signs of improvement and some respects in this region. north asia still struggling to get up. but all across the board still love the 51, the dividing line between expansion and contraction. not too favorable of an outlook but fits and starts. one thing i would note, signs we reopen,ng as factories you are hoping to have some customers to sell to. the vietnamese production data last week showed a lot of export customers were down. only china and south korea were showing promise in terms of pickups and orders. a lot of fits and starts. ofn within asia, a lot uneven recovery. shery: we are seeing more civilization on chinese economic data the, especially -- data though. we are going to get the numbers later today. we are looking at these

economies. at least for those economies that are heavily dependent on china. certainly that is what they want to see. china is still the number one -- as they open up earlier than some other economies. a lot of the story right now is domestic. when you shut down eight economy for this long you need to get your constituency in order for us. week could show some glimmers of hope. stimulus is still coming. we saw japan's big package last weekend and other economies thinking of pumping more into their economies. we will have to see if all that has an impact in the month ahead. hopes on finding a

vaccine and better ways to treat the virus. lifting the lockdowns and moving forward. haidi: let's get you a quick check of the markets. we are seeing brought outsize for the nikkei, the kospi, although u.s. futures returned under a little pressure. shery: we are seeing japan and south korea recovering from earlier losses. the nikkei when it comes to gains -- games, communication and technology leading the rises in the japanese stock market. we got first capital spending rising instead of contracting. better-than-expected numbers. the kospi also surprisingly seeing and upside of more than .7%, despite the fact we saw huge contraction in those export numbers. asx 200 is being led lower by real estate and utilities. we got the may house prices out

of australia that showed a contraction from expansion territory. that could be weighing a little on the stocks. u.s. futures down .3%. next, hong kong is caught in the middle as u.s. and china tensions ration higher. -- ratchet higher. we talk about the war of words. this is bloomberg. ♪ is bloomberg. ♪

the u.s. secretary of state mike pompeo says beijing -- means america now has no basis to treat it city anymore more favorably than it does mainland china. let's talk about the implications of that with asian trade center founder deborah elms. is there any meaningful implication what we heard from president trump and his a ministration so far -- his administration so far? michelle: there might be. it's very possible that you will have significant ramifications for hong kong and hong kong's economy. but there may also be a situation where there is a lot of sound and fury and nothing actually happens. fit withw does this the fact that just a few months ago we were getting to the completion of the phase one deal.

the fulfillment of that deal has not even happened. cusp ofke we are on the not just another trade deal between china and the u.s., but between the likes of china and australia as well. michelle: i think you can see the breakdown of the global order. in particular the lack of institutional capacity to handle could argueith you a lack of leadership, but maybe too much leadership with too many countries who are pursuing their own national interest. the u.s. and china of course among them, but there are lots decided, who have rightfully or wrongly, to push through a number of policies they may want to do anyway. i think the net result of that is a lot more uncertainty,

chaos, and the further breakdown of those institutions that might have stabilized systems. shery: president trump was announcing the u.s. will withdraw from the w.h.o. about this really competitive dynamic between the u.s. and china, secretary pompeo framing is the communist party in china being intent on the destruction of western ideas, democracy, western values. shifthis dynamic just into a sort of west versus east competition? and is that even feasible now that china is such a big part of the global economy? michelle: there are certainly some folks in and around the white house who would like to see that happen. they would like to see a permanent decoupling. they would like to see china pushed down a peg and americans returned back to the top. but that is tricky to do.

as you pointed out, the china of 2020 is not the china of two years ago and certainly not be china 20 years ago. it is hard to figure out how you will manage what was already going to be a complex relationship. no matter who is in the white house, it was going to be tricky. but this particular administration in the u.s. coupled with this particular administration in china has made what -- made it even more front. then where do we go from here? how can these two sides resolve their differences, can they resolve their differences, or are we doomed to continuing escalation for the foreseeable future? also risksescalation becoming physical, because we are now not only seeing tensions from hong kong, but we have the ongoing tensions over taiwan as well. michelle: exactly. so the challenge has been in dealing between the u.s. and

china relationship under this administration in particular, as you continually ratchet up the rhetoric, what is the level of action you are going to take? will the action mask the same screaming intensity of the rhetoric? if so, then what? if not, then what? what are the challenge -- one of the challenges i would argue always with trump's policy with china is there has not been much of an offramp. over the last couple years he has been in office, he continually ratchets up detention without giving himself any way to use it -- reduce at. we saw it a little under phase one but almost immediately after that was signed the beginning of the year, there were complaints about it. and those complaints are now reaching a fever pitch. i think the challenge is if you continue to ratchet up rhetoric, at some point actions really

have to match the language. then what? and the potential for catastrophic miscalculation by either side is always been high. of course the more you inflate tensions, the easier it is to imagine a catastrophic disaster on one side or the other, or both, frankly. what does a post-pandemic world look like for worldwide trade? what does the post covid scenario look like for the ppp as we struggle with these questions about supply chains and disruption to essential travel? in the immediate term obvious the trade is in trouble. in the immediate term it is difficult to move cargo. even cargo with people unable to move. goods and services affected. imports and exports. high-tech goods and low-tech goods.

everything is basically badly indicated -- implicated for trade. in the medium turn we will see some supply chain shifting because people recognize that being overexposed to one particular supply chain is a bad idea. i do not think anyone is prepared yet to pay the cost of what will take to restructure some supply chains and make them more robust or redundant. if you have multiple sources of supply, your costs go up. i am not sure anyone in a post-covid world at the moment is prepared to pay more for anything. because we are already seeing tremendous amounts of economic pain. so how much more would consumers be willing to pay? how much more can companies afford to pay? i do not think we will see the move to supply chains that some expect, but i should say that firms should be watching -- looking much more closely at trade agreements. because in a world of very limited margins and cost

control, which has become crucial, if you use a trade agreement and you use it well, you end up with either cost savings or more market access or both that your competitors do not have. so i would say for firms, when you think about what are we going to do post-covid, part of that scenario planning on to be are the trade agreements out they we are not using? i'm not just saying that because i run rade, but it makes sense. shery: thank you so much for your insights. we have to leave it there. next, china's movement to draft -- has business concerned. we speak with tara joseph in hong kong next. this is bloomberg. ♪

a quick check of the latest headlines. france may strain relations with the u.s. by think twitter would be welcome to relocation. twitter's decision to fact check its tweets has led the president get angry. france's digital affairs says twitter would be welcome in france if it were to leave america. airbus is said to be reasserting

-- meeting will discuss output rates with production having already been slashed by a third in april. they aim for about 40 plans a month while they determine if the global recovery will be v or l-shaped. singapore secured investments in the first four months of the year, exceeding what was expected. this, as coronavirus pandemic hits the economy. the trade and industry ministry says the biggest commitments have come from the electronics and info communications centers, but admits retail and tourism remain badly hit. we have an alert on the bloomberg china reporting 16 additional coronavirus cases for may 31. all of the 16 cases were imported, according to beijing. asnew asymptomatic cases,

global case is now top 6.1 million. we are seeing more and more economies ease restrictions. shery: let's turn to more on the rising tensions between the u.s. and china over the status of hong kong. the issue is american businesses caught in the middle. about 1300 american companies are in hong kong employing someone hundred thousand people in sectors ranging from financial services and technology, to infrastructure. for more we are joined by tara joseph, president of the american chamber of commerce in hong kong. great to have you with us. get us started with what your members are telling you. how concerned are they about this national security law in beijing, and where that they are drawing up contingency plans about their business in the city? tara: i think everybody is starting the week in hong kong feeling somewhat sensitive and concerned. so many questions unanswered. cansweek we had two huge

of worms in terms of announcements. first, the national security law being passed by beijing for hong kong. and then the u.s. saying they no longer view hong kong as autonomous enough to merit special treatment. that opens up such a large number of questions on both fronts. what is the future of hong kong going to feel like for businesses? which side of that, the national security law and the question that brings about to security about doing business here, and also the special treatment by the u.s.. if that goes away, what would that mean? so, so many unanswered questions right now. shery: what are your members doing given the uncertainty? are they rushing for the exit? tara: no, we are not seeing a rush for the exit at all. what we are seeing generally is everyone first digesting the news, and second of all, looking at their footprint in hong kong

and thinking through whether that ought to change, reevaluating, and looking to the months ahead. first of all, china is a very important market for many american companies. hong kong is also connected to southeast asia, which is an increasingly important market. and many important american companies have been in hong kong for many years. it is a positive experience, an excellent place to do work. it is just that in the last year, no one has been able to catch a break, between the protests and the growing tensions with china and the coronavirus, etc. so it will take some time for people to digest the impact. and also what we really hope is that we will hear more details from beijing on this national security law, and what that will mean in terms of specifics. and then from washington, actual specifics in terms of how this

special trade relationship and economic relationship could actually be unwound. because it is not just like flipping a switch and it is done. there are many aspects of this special economic relationship. there much consultation going on in hong kong between business and community leaders within the financial field, talking to, say, pro-democracy activists, to see whether there could be any consultation beijing on how this is implemented? tara: well, i know that many business groups will meet. we have an international business committee. we will be seeing a city official and the government later today for their explanation of how they see the national security law unfolding. generally among the business community, we do not get

involved in politics. it's our job to really advocate for business in hong kong. so to go ahead and lobbying individual legislators is a little bit tricky. we do not want to go there. however, we do want to see if there could be any type of action that hong kong could take. the hong kong government could take, to essentially bring some more light to what this national security law would mean. we have not heard anything yet. the hong kong government is simply reassuring people in hong kong, or trying to reassure international business that there will not be any changes, but there are no details there a t all. haidi: is there also any kind of, i suppose thought from your membership, the people in the company that you speak to, that

some sort of version of a security law would in fact lend some stability to the city and the business environment after what has been a very tumultuous 12 months? tara: certainly nobody has enjoyed the violent protests. that has been bad for hong kong's image and bad for business. but they national security law opens up a lot of uncertainty. if you are doing business in mainland china, you know the rules of the road. you know what you can do and what you cannot do. but bringing this national security law into hong kong, on this there are some real explanations of what it is going to mean, and specific areas that could be affected, then it leads to uncertainty. haidi: tara joseph, great having your insights. amcham hong kong president. we take you to fort lauderdale in the u.s.

we continue to see the protests unfold. you are seeing police forces on the streets, as violence has spread across the u.s. shery: over the weekend demonstrators and police clashing from new york to los angeles. you're looking at fort lauderdale. this, as we follow the killing of george floyd, a black minneapolis man who died after a white police officer pressed his knee into his neck for more than eight minutes. this has led to burning cars and violent arrests. several mayors imposing curfews at a time when the u.s. economy was slowly starting to reopen. haidi: that is it for "daybreak asia." coverage of the situation in the u.s. continues as we look ahead to the start of trading in hong kong, shanghai, and shenzhen. do stay with us. the china open is almost upon us. an uncertain start to trading in

may for global markets. this is bloomberg. ♪ this is bloomberg. ♪

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to bloomberg markets china open. protestsres fall as raged across america. mayoutpouring of anger threaten a post-virus recovery that was already fraught with risk. hong kong stocks are in the spotlight as the u.s. seeks to devalue the city's preferential trade status. the young son has seen its worst month in