♪ >> welcome to daybreak asia. are counting down to the market open in japan and south korea. our top stories this hour, asia-pacific markets look to start the week with gains after payroll numbers smashed expectations. and eightfour straight session as opec and its allies agree. the new deal last a month and a cartel will keep an eye on production levels.

the national guard is ordered out of washington as people protest continues. >> let's check on the markets. saw ong those gains we friday, resuming the rally on better than expected jobs numbers from that job support. we are seeing new zealand trading higher. bouncing back from the friday selloff. sidney, we don't have trading today due to the queen's birthday, long weekend. we are watching the aussie dollar. in terms of u.s. futures, we have seen a pop up of about 0.5%. let's look at the oil patch. we had the extension by opec in the alliance. we are seeing upside when it comes to crude, up by 1.6%. new york crude just over $40 a

barrel. continued gains when it comes to commodity -- commodities related currencies. sophie: protests continue across the u.s. and around the world as some of the largest crowds gathered over the weekend. the demonstrations have been largely peaceful. cities have lifted curfews and president trump has ordered the national guard out of washington. a bloomberg editor is on the line from d.c., what is the state of play? say, protests were much smaller than they were saturday. it seems the fever has broken in terms of violence or looting, things are a lot calmer. i think the protesters made a good point and some are starting to look ahead to what comes next. we heard from democratic

lawmakers today, they plan to mondayce a bill on related to police policy and what we are seeing is a switch and tone from the first round of protests to seeing what comes next. one interesting tidbit out of washington today was mitt romney , the republican senator from utah, was marching with black lives matter. it has been an interesting few days in the capital. numbershe latest jobs smashing expectations, but you look under the hood, it continues to show the economics of the racial divide in the u.s. ros: yes, very interesting reports because of the way it accededexpectations -- ededctations -- exc

expectations. black unemployment was up even though overall unemployment was down. indicator, theg final thing to go down in the first data point to go up. there is some structural inequity in the u.s. that i think is going to be the focus of lawmakers, especially democrats, over the next few weeks and months. we heard yesterday from vice president mike pence, he says one of the things that he and donald trump will be doing is listening to black leaders and trying to get to watch may be able to be done about that. i don't know that there is any specific policy ideas that they have in mind, but mike pence suggests they are prepared to listen. sunday, colin powell coming out with remarks, saying that the president has drifted away from the constitution.

colin powell back in joe biden for the november election. have a listen to what he said. >> i couldn't vote for him in 1996 and i cannot support president trump this year. i'm very close to joe biden on a social matter and a political matter. i have worked with him for 40 years and he is now the candidate and i will be voting for him. powell becoming the latest notable republican to make such remarks. what does this imply for republican support for the president? sign that the centrist wing of the republican party, of which colin powell would be one, do not like president trump that much. in general, the party has moved more to the right since people like powell were in government.

it may not be that significant, veryhe numbers -- prominent republicans have .poken out against trump we talked about mitt romney, ofa murkowski, just a number military leaders coming out in the past week, chairman's of the joint chiefs of staff, nato supreme commander's, it is very .rominent at the margins, you would think staff has eroded his support. we saw one pull out of michigan showing joe biden up 12 points, way beyond the margin of error. point isesting data that independents breaking very hard for joe biden over trump. that would be a lot of people in , people not keenly

affiliated with one political party. that -- definitely some danger signs for the president but five months ago to the election. he will be waging a strong topaign of his own choosing turn those numbers around. let's get you to headlines. >> the prime minister of singapore says the future will look different with covid-19. city state won't be returning to the interconnected global economy that existed before lockdown and with unemployment rising, the future will be more tough. singapore spent the equivalent of 20% of gdp on its response to the virus. beijing issuing a travel warning, saying discrimination against asian people is on the

rise. the menisci of culture when chinese travelers to be on alert and not to go to australia. the warning follows a call into the investigation into the origin of the coronavirus and beijing's decision to put tariffs on some australian goods. opec and its allies have agreed to a one-month extension of production while calling on members to stick to certain levels of bid allegations of cheating. an energy consultant says the deal could see prices calling to -- climbing to $50. the opec-plus monitoring committee will meet every month. russia is investigating an oil spill in siberia, an estimated 20,000 tons of you will leak about 1800age plant kilometers northeast of moscow. ae plant was operated by company accused on making one of the era -- the area one of the most polluted areas. president putin and others only

learned of this from social media. 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. this is bloomberg. ahead, we hear from a secretary about the future of an economy battered by the coronavirus at big era protests. his only interview with international media later this hour. first, we preview the work ahead -- the week ahead. this is bloomberg. ♪

♪ >> exports fell less than expected while imports slump. joining us to discuss the numbers and give us her outlook for the week ahead, alicia

herrero joins us. ray to have you. given the context of these numbers where on the export side, we had that surge in medical products. on the import side, in terms of imports, it was not all bad so much as volume was down when it comes to commodities. does that give you an indication that we are starting to see the pillars of growth domestically within china improve? thata: well, we can argue prices of commodities match more than that.

[inaudible]

haidi: we are having some difficulties hearing you. we will try to get back to you in a moment. we will try to reconnect in a moment. we have been talking about our top stories, cities across the u.s. evaluating easing restrictions and reopening businesses. kudlowrg asked larry what the country can expect an economic relief and how quickly the next stimulus package will pass congress.

the get't know about congress fast part. we have taken some time off from legislation even though we are talking to both parties. we have done bipartisan conference calls and there is always conversations among our leaders and their leaders but we wanted to assess the economic story and see what the original 3 trillion -- what the original $3 trillion packet was going to do and let the federal reserve develop its various lending facilities. backoint is, we will come after july 4 and we will have a good discussion. we need policies that will help long-term economic growth. i think the rescue package was in norma's the helpful. i think the payroll protection program probably saved 50 million jobs, $510 billion. is story in today's numbers

the temporary layoffs have gone back to work, roughly 3 million. that is partly a direct function of the ppp program and the tax rebates and unemployment help. there you have it. i don't want to rush into anything, neither does the president. several times today, he mentioned that we would have bipartisan talks. he is taking to the payroll tax holiday for the workforce, which i think is a terrific idea. we are looking at a number of progrowth options inside the administration now. >> let's talk about the enhanced unemployment benefits that expire next month. there was some concern they would discourage people going back to the workforce. that is not what is happening. what is the white house's position on extending those benefits? >> we have not made a final decision. i can't get ahead of that. i will say, there is a lot of $600 -- to perform the

there are probably better ways to do it to get around the disincentive problem. but itnot show up today, is early and i'm concerned about that. the workforce for going back to work, we are looking at a number of options on that. there in mind, i don't think today's numbers was a one-time thing. the business openings by may 12, the survey week, was less than 50%. the chamber of commerce down here is estimating now, in early june, nearly 80% of small businesses have reopened. that means more and more people who were furloughed or temporarily laid off will get back into the labor force in june and july and so forth and as you know, there have been a lot of green shoots popping up, driving,t is mobility,

the certain housing purchase applications and other indicators. i think the economy, the contraction probably trough in mid april, it was quick, it was heartbreaking with hardship, but i think we will have a sharp rebound and you will see it in the second half of the year, probably with 20% economic growth. >> i hope we see serious growth. as we have seen, this jobs market can make people look stupid quickly. i want to understand, how will you know that you have done enough on fiscal seamless in the next month? what are you going to be looking for to tell you whether you need to do more or whether you can pause? >> we are going to look at the general trends. we try to track every number imaginable, particularly the so-called high-frequency leading indicators. i'm not going to hang my hat on this, but the apple mobility

index is now widely used on wall street. that is an indicator of people getting out and traveling, they are looking for directions, most of it is driving. that is something we might not have thought about before the pandemic, but now we are looking at it. i'm looking at traditional indicators like mortgage applications or new business startups, both of which are rising sharply, then the traditional indicators on jobs, income, sales. we will try to look at the numbers to get a feel for what is working and maybe where the trouble spots are. that was larry kudlow speaking to us earlier. let's bring you back to alecia garcia herrera. thank you for patiently rejoining us. we were talking about the recovery and the chinese economy. are you concerned, given that we

have consumer producer price data out this week that this is a deflationary recovery where there is more activity on the restarting of supply-side than the demand side? [inaudible]

sophie: thank you for your time. have plenty more to come on daybreak asia. this is bloomberg. ♪

♪ >> in a newly published paper, it has acted transparently. let's get to our correspondence for more. what are the details of this paper and what is the purpose of it being released? >> this paper details the measures to try to fight the

coronavirus, attempting to push back against this and that china tried to cover up its response to the outbreak. 400,000 deaths globally, the pandemic has tension with china's relationship with countries, especially the united states, where donald trump has faulted china for having failed to contain the outbreak. paper,ays in this without directly mentioning the u.s., that it shared information that was ignored by certain countries. china has issued an alert, winning its citizens not to travel to australia. how does this fit into tensions?

it appears we have some audio issues with our reporter. this move on to our business flash headlines. financial authorities provide around 800 billion u.s. dollars to keep the fly carrier operational during the pandemic. government bonds will be issued as early as the end of this month. korean airlines has received a similar amount for the first half and the latest one is aimed to keep the carrier afloat for the rest of the year. british airways is threatening to fire all 4300 of its pilots and be higher them on individual contracts in disputes with unions over new employment terms. it aims to shed 12,000 jobs as it navigates the coronavirus destruction. the carrier has started a legal fight to stop the self-isolation requirements for arrival.

the rule would the wetlands to reduce services in july. the anticipated winding down of the coronavirus lockdowns is punting a recovery at rental sites such as airbnb. the business had shut down in march with people confined to their homes but -- but airbnb says the easing of restrictions has brought a rising demand for vacation rentals. the ceo says people want to get but are not keen on taking a plane. apple aims to boost sales by letting people pay by monthly installments. sources say the plan will be rolled out in the coming months, letting customers, -- split the cost with staggered payments. the deal will cover ipads, keyboards, and some monitors over a 12 month period. apple launched a program last year with zero interest. net ease has priced its hong 23 hong kong at

dollars per share, about 2.7 billion u.s. dollars when it begins trading on thursday. the second-biggest gaming at a timekes a debut of rising tensions between the u.s. and china. washington has limited u.s. companies must be access. ining a look at u.s. futures asia morning trade, we are seeing a pickup of 7/10 of 1%, nikkei futures have opened to the upside while the yen holding steady after a three to decline. above $40w york crude a barrel, up more than 2%. next, looking past the perrone a virus -- the coronavirus pandemic. the biggest health care deal and history. this is bloomberg. ♪

♪ two drugmakers behind prominent responses to the pandemic are looking into the possibility of a combined future. bloomberg learned that astrazeneca has made a preliminary approach to its rival gilead. if the deal were to happen, it would be a blockbuster for the industry. >> it would be a history making deal, the biggest ever in the drug and health care industry. is the u.k.'s biggest drug maker. it is also a codeveloper of a

promising vaccine for the coronavirus. if u.s. rival,, is valued at $96 billion, that means if you had a merger between these two large companies, it would be valued close to $240 billion. gilead is the maker of the only u.s. approved treatment for the coronavirus, remdesivir. bloomberg has learned that astrazeneca made a preliminary and informal approach about a potential merger a month ago. according to people close to the matter, they made contact to gauge if there was interest and a possible tie up. these people are saying that no terms were specified, there were no formal talks. while gilead has discussed the idea, no decision has been made. this is according to people close to the matter, representatives from both drugmakers have declined to comment. astrazeneca has made treatment for cancer and cardiovascular

disease. i'll analysts say there is not a lot of therapeutic synergies between the companies, not much overlap, they say that astrazeneca has been facing questions about its ability to grow and buying a company like gilead that has a lineup of strong stellar's makes financial sense. indicate, as we get pharmaceutical players everywhere focused on covid-19 treatments and vaccines, with this kind of deal be a return to normal? su: that is the indication we are getting from observers, that it looks like you've got major players starting to look past the covid crisis. this is a sign of that. in a year where the race to be the first company to come out with a vaccine or treatment that was approved for covid-19 has dominated the headlines and the focus for the drug making and health care industry. it is important to point out,

analysts say that these covid-19 related therapies or vaccines, unlikely to be big money makers. gilead was giving away its early manufacturing of remdesivir. you have drugmakers that are saying, this could be blockbuster when you look at the size of other deals. back to you. haidi: you can get more on what all -- the implications of this deal in today's edition of daybreak, just go to your terminals. you can customize those settings so you just get the news on the industries and assets that matter to you. we will stay on the coronavirus topic. we spoke about the status of these ongoing vaccine trials. >> things are progressing at a

nice pace when it comes to some of the vaccine trials, studies are moving forward into their second phase, which is awesome -- which is often the signs of whether we have the vaccines have the potential to be -- to work well in the population. in addition to that, there have been studies that have started using just antibodies as a therapy. somenes induce antibodies, companies have jumped to the fact of giving people those antibodies directly. those studies are also moving forward and have shown good promise. from the side of your immune response, there has been good progress towards seeing whether we have good future treatments for this. >> are we loosening public health restrictions and a good way? are we able to contact -- contract trace people? andrew: that is a great question.

, whenare mixed results you look across the united states, there are some states that are doing a good job in terms of keeping cases level. there are a few states where you are starting to see upticks in terms of the number of cases that are there. beinghing comes down to good about identifying cases and being able to track those cases so that the people who are coming into contact with those individuals can be identified and isolated. that is the face we are moving into as we expand our economy, booze and public health restrictions, and still keep the virus down. states will have to be proactive, monitor how they are doing, and work towards optimizing those contact identification and tracing strategies for these rollouts to be sustained. >> the contact tracing work?

is there a better way than just reopening the economy and seeing the number of deaths to try to track where it is? andrew: we are going to have to really change the way we are our life.g the social distancing, mask wearing, other things in terms of limiting crowds, these are going to be the things we will have to deal with for the next six months, if not a year or more. to make sure we are keeping this virus down and not seeing this surge of cases that so many parts of the country saw this spring when the virus first made its way across the united states. >> what we know about antibodies? are antibodies something that protect you against being infected or for the moment, do these tests only prove that you have had covid-19? andrew: another great question.

there are two parts to this. we are learning more about the antibody responses that are being induced by infection and there are good results coming from that, showing that people are generating protective responses. the important thing to note is the tests are more limited in -- then what they tell you. the test can tell you if you have been infected but they can't tell you if they have protective antibody levels, at least not the tests around right now. we have to be careful about the antibody testing, just increasing across the country as it becomes more available. it tells you if you have been exposed but does not necessarily tell you at this point whether you are protected from reinfection. >> doesn't make sense to get tested one time but also wait for more sophisticated antibody testing? will these come out to be able to tell you if you are protected from the virus and for how long? hope thatere is a

once we really identify what arm of the antibody responses are providing the protection to people that the tests can be fine-tuned so we are answering both of those questions. have you been exposed and are you protected? >> that was a public health professor at johns hopkins bloomberg school of public health. the school is supported by michael bloomberg, founder of bloomberg lp and bloomberg philanthropies. hong kong financial secretary sees outflows from the admin strata region. we hear from paul chan next. this is bloomberg. ♪

♪ >> this is "daybreak: asia." has flitted its curfew as it prepares to open for business after the pandemic. isrew cuomo says covid-19 the one variable for the city and is calling on all protesters to seek health checks. the weekend saw some of the biggest demonstrations across the u.s., most peaceful and with arrests sharply down. rose to aade surplus record as a jump in medical exports help shipments follow less than expected, though imports did decline.

x was fell by 3.3% from a year earlier while important slumped almost 17%. that left a trade surplus of $63 billion caused by the falling prices of commodities that china needs. beijing issuing a travel warning same discrimination against asian people is on the rise. the ministry of culture once chinese travelers to be on alert enough to go to australia. the warning follows a call for an investigation into the origins to the covid-19 virus and beijing's decision to put tariffs on some imported australian goods. reports from london say the government is planning to tighten legislation on takeovers amid concerns about china's influence. the johnson administration will make it mandatory for companies to report attempted mergers that could threaten national security. the prime minister is said to want academic partnerships and research projects to be included in any future bill.

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. this is bloomberg. sophie: a territory because i course to its liking economy. limerick spoke to paul chan about when he sees a recovery. -- bloomberg spoke to paul chan about when he sees a recovery. this is hopeful, but is very much depends not just on , but the coronavirus situation globally, because if this is under control, a lot of economic activities can be revived. secondly, the relationship between the u.s. and china,

particularly on the trade front, will affect our foreign trade. when we get the coronavirus situation under to aol and society back stable environment, we are going to encourage our own consumption. $10,000 for every eligible hong kong citizen. >> people are still waiting for that. sec. chan: is coming soon. >> that has been a big complaint, they have not gotten the checks yet. sec. chan: we are working very hard. >> why does it take so long? sec. chan: in the u.s., you pay taxes. .e pay taxes once a year the data from different sources cannot be used for this

particular sources. >> more stimulus needed and where and how? sec. chan: we are looking at the stimulus package we have outlined. we will wait for these measures to pull out before we decide the third one. >> the gdp growth was the worst on record. is that the worst of this year? you have raison d'atre that you can give us that you might have to revise your forecast again? i think it is for a contraction for 4% to 7% for the year. sec. chan: we have another update due in august as part of our regular process. >> what are the tea leaves telling you? sec. chan: it depends on economic recovery in western countries. yes, we suffered in the first werter, a globally, i think

are in a recession because of the virus. >> are you seeing indications of capital flight? figures speak louder than words. ever since the announcement of -- it is on the strong side. when i talked to the banks, when i talk to wealth management individuals, there is no obvious outflow of capital. >> local news shows signs of people a little bit worried. local money exchanges running out of u.s. dollars or lining up to get u.s. dollars or other currencies. that has happened in the past in times of crises. people seem to want to get hard currencies. is that just a temporary phenomenon right now or is that

an indication that there are some deep-seated concerns in society? believe thisdo not phenomenon is a reflection of any deep-rooted issues. is anxiety ands sentiment. last year, during the social turmoil, we saw similar phenomena. went throughen we those difficulties, our financial market had been operating smoothly. there was no obvious capital effect. deposits in the banking system at the end of last year compared to the , a 1%ing of last year growth. months,in the past four

the past 10 days, we did not obvious capital outflow. >> paul chan speaking to us earlier. more on the outlook for hong kong when we are joined by the economic policy committee member , with us later on. next, we will dissect china's gdp figures with the head of japan economics. this is bloomberg. ♪

♪ sophie: we are waiting for japan's gdp figures in a minute. let's bring in the global research ahead of economics. it does not mean there will be a change in the bleak outlook for the japanese economy. how do you see the second quarter faring? i think it is important to remember that these numbers are from more than three months ago by this point. we are expecting a small upward revision or smaller contractions but that is on account of a better number that has more to do with survey functions.

second quarter, we are looking 20% sharp fall in gdp, over on an annualized basis. sophie: let's get more into that capex number. we saw buildup in cash ahead of the virus outbreak. how do you see the picture going forward? i think, in terms of where we stand with the economy, the good news is that with the listing of the government's state of emergency, the economy bottomed last month. , thatr, the question is demandin june, any followed by third quarter onwards, on that point, we are still expecting a sluggish recovery because there has been a big hit to incomes and labor markets from the shock and we think consumer confidence will

be depressed. i think some parts of the service sector will struggle to get back to normal levels if you think about restaurants, events, bars. we don't think consumption is going to return to the pre-covid normal for a couple years. that, have the numbers out from japan, the first quarter final gdp numbers coming through. 3.4% drop in up a limitary data, we are seeing first quarter gdp shrink by 2.2% on an annualized basis, the forecast for 2.1% contraction. when it comes to business spending, we saw a pickup, 1.9% on a quarterly basis. that currently -- the current account, coming in at below the estimate. hunterss is for three ¥60 billion. with this data, what can we extrapolate? table digit likely for the

japanese economy in the second quarter. business spending on the rise. what are you seeing? with the latest data -- haidi: i want to check that you can still hear us. in terms of gdp numbers, how concerned are you that we are not going to see the reflationary or impact continue given that we had household spending in april falling the most on record? do you anticipate a recovery as the economy comes out of this state of emergency?

we are going to try to get back to izumi in a moment. we are having a few technical problems getting in touch with her. let's get a check of the latest business flash headlines. astrazeneca is said to be interested in a merger with gilead. sources tell us the informal contact has been made in what would be the biggest health care deal in history. no terms have been released endo decisions have been taken. astrazeneca is valued at $140 billion, with gilead with just under $100 billion. we are told gilead is not interested in a sale or merger. apple inc. to boost sales by letting people pay by a monthly installment. the plan will be pulled out in the coming months by the apple card, letting customers split the cost of new gadgets with interest-free payments.

the deal would cover ipads, keyboards, and some monitors. apple launched a program last year with 24 months at zero interest. -- netease would raise rent doing to 70 billion u.s. dollars when it begins trading on you say -- on tuesday -- itld raise $200 billion when begins trading on tuesday. billion whene $270 it begins trading on tuesday. >> we are taking a look at stocks, u.s. futures pointing higher by 0.7%. nikkei futures getting more than 1%. again holding steady after a three day decline. oil gaining ground after a

six-week event for crude. keeping a close eye on commodity spaces given the opec-plus deal that was hammered out on saturday. this question on whether or not russia and saudi arabia can enforce the rules when it comes to that agreement. we had japanese first quarter gdp numbers, we saw a contraction of 2.2% on an annualized basis, a slight tick up in business spending. more so than the estimated numbers. we are going to get reaction on those numbers when markets open at the top of the hour. we are keeping an eye on what is going on in that space. we want to highlight, in new zealand, kiwi stocks gaining ground. afterthe advancers, this it signaled that it would seek a

cost-cutting plan, potentially seeing job cons -- job cuts. hour, theon the next head of -- joins us. this is bloomberg. ♪ you say that customers make their own rules.

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♪ >> welcome to "daybreak: asia." japan and south korea have just opened for trade viewed let's get you are top stories. asia-pacific markets with gains after u.s. payrolls smashed expectations. higher in tokyo and hong kong's. global stocks have added $20 trillion since the bottom in march. oil rises for an eighth straight session. opec and allies agreed on

further output curbs. they will keep a close eye on production levels. the future of hong kong amid rising tensions at home and abroad. we hear from the financial secretary as the city reels from the coronavirus and months of protests. sophie: let's look at the opening in tokyo after the final first-quarter gdp data just came out moments ago. we are seeing stocks any ground with the nikkei up 1%. the topix also willing to the outside. gain.e-day on boj bond buying, only two on the agenda and. markets are watching for potential buying in this sector. kospit to check in on the , 1.5% added this morning. we are watching korean air as it

gets more funding support. the kospi set to erase its year-to-date month. also, trading at a march 11 hi. the finance street to sell bonds. let's check in on s&p e-mini's. look at commodities. above $43 ae barrel. iron ore futures in singapore, above $100 for the first time since august 2019. this in the wake of brazilian labor court ordering the shenzhen -- the shutdown of a valle mining comp looks after workers tested positive for coronavirus. haidi: the biggest gains in more

than 80 years as investors look past political tensions toward the reopening of economies and growth. joining us is the head of active investments in the asia-pacific at blackrock. thank you for being with us. we've been talking about the potential for asia to be first in, first out of the pandemic crisis. is that still your base case, that we will see the fastest and most robust economic recoveries in this part of the world? belinda: thanks for having me. we are seeing signs of recovery across a number of markets but i do think there will be big divergences between countries and regions. we are seeing that in the macro data. response from an economic standpoint is clear. if you look at southeast asia, it is lagging. our view is markets will price in a hit and look forward to

improvement, which i think we are already seeing. the news last week was supportive of a rally in risk assets. haidi: in terms of emerging markets and what the future holds, i want to bring up one element, how the u.s. dollar travels from here. we are seeing it slipping for seven straight session, the august losing streak since september 2017. at the same time, we are seeing the -- dropping. what is the biggest driver for currency headwinds? importingt is and question to ask for asian assets. we have seen the dollar weaken in's probably the middle of march. -- since probably the middle of march. it is meaningful for the region asian assets and

particular risk assets will be driven off a weaker dollar. bound, likely stay range but we could see shifts in this direction. general, the dollar weakness is positive for risk assets and asia. sophie: let's get into your investment themes identified for your team. let's get into the oil majors piece. from the agreement we saw opec-plus, what does this imply around the supply-demand dynamic? belinda: over the weekend, we onl them expand decisions energy and we have been rebalancing into energy. marketeve that big fluctuations with coronavirus, it caused a supply shock and demand shock, plus disagreements with the leaders have taken oil prices to distorted levels.

we are expecting higher prices going forward. we are optimistic on energy opportunities in the region. sophie: i would like to turn to the travel segment. we are seeing the reopening of economies across the world. established in certain economies, particularly in asia. a pickup in airline stocks across the board, although there are some limits with what that implies for demand. -- youside are using seeing? belinda: we are looking to rebalance into domestic focused travel names rather than international. we don't see those groups coming back yet. you also need to be selective around finding companies that have a stronger balance sheets in the space. as you saw, we saw meaningful rises in airline names at the end of last week. we -- haidi:er can

how much longer can we expect to see corporate debt rally continue even the levels we are at at the moment, and when the fed meets this week, they are not likely to take their foot off the pedal. belinda: i think the meeting for the fed is something we want to watch this week. this has been unprecedented in terms of the policy response we have seen, particular from the u.s., so i think watching what happens in the fed meeting will be important. it will give some indication about how much further they need to support the economy, that policy response will remain strong regardless of the fact that we saw a strong jobs report at the end of last week. haidi: in terms of the bond space, china is something you are looking at? belinda: we have been positive on china for some town. -- for some time. favorable on china

high-yield property sector. we think the fundamentals are stable and we are seeing a recovery in construction and sales. when you look at china and the policy response, it has been different to the rest of the world. when you look at the credit growth coming out of china and the size of the market, i think both will be positive in terms of material names for equities as well. china is favorable. turning to india, the country enters the first phase of reopening this monday with more dire economic news likely later this week, prompting more calls for rate cuts from the r.b.i. along with bond purchases from the central bank. purchases,es to the what are using? belinda: [indiscernible] with is really in line s&p.

we don't think that is meaningful, but we are more cautious and remain at quality. potentiallyide has been hit particular a harder -- particularly hard. liquidity was withdrawn particularly in march, this market was really hit very hard. rebalances we want to into the carry trade in equities. some of the sectors within in india, 20 year lows. from a valuation perspective, we think there are opportunities. sophie: thank you so much, belinda boa from blackrock. let's check in on airline stocks on the move this morning. in korea, korea airlines and grout -- gaining ground on news they will get funding. tokyo stocks gaining ground, and airline up 7%.

lines thating news they are planning a large boosts to cargo flights this month. also reports that they are looking for more funding support, including credit lines from banks. oft will past ¥950 billion credit support. cutough they are looking to international flights. planning more to come. this is bloomberg. -- plenty more to come. this is bloomberg. ♪

♪ -- karina: this is "daybreak: asia." china's trade surplus rose to a record last month.

imports did the klein, exports -- did decline. it left a trade surplus of almost $63 billion, helped by the falling price of commodities china needs. china's simmering tension with australia is continuing. the minister of culture warns chinese travelers to be on alert and not to travel to australia, following canberra calling for oninvestigation into tariffs australian goods. reports from london say the government is planning to tighten legislation on takeovers amid concern about china's growing influence. the times said the johnson administration will make it mandatory for companies to report attempted murders that could threaten national security. want academic products to

be included. members are trying to stick to -- amid allegations of cheating. an energy consultant says a deal could see brent climbing to $50. it is seen as a win for saudi arabia and russia as they try to rebalance the market. willonitoring committee meet every month. 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. this is bloomberg. sophie: thank you. global stocks set to rise on the back of a welcome surprise from the u.s. labor market, as payrolls boosted -- boasted record entries in may. kathleen hays is here with the numbers. that was a strong signal jobs could be up more than

expected but there was any reason to expect what president trump called and its standing -- outstanding report? kathleen: people describe this as jaw-dropping. not expected as all. the adp report suggested the drop would not be as much is expected, but this knocked people on their heels. payrolls,y rise in unemployment falling when it was supposed to move up, rod based job gains across sectors. a chart to put individual perspective. we saw payrolls up to .5 million in may. that is the biggest monthly increase ever. they plunged nearly 21 million. look at the chart. the drop was april. unappointed was supposed to drop to 19% and it fell to 13.3%.

not expected and the labor department said there was a misunderstanding with the way some people counted themselves furloughed versus employed and it might have been three points higher on the jobless rates, but not as high as protected. one of the negatives and the report, 21 million u.s. workers remain unemployed. jobless claims show people are still laid off in the millions. unemployment at 16.8% in may, a bigger gap versus the u.s. unappointed rate, the highest since 1984. one more reason many economists are saying there is more fiscal spending needed. president trump called the jobs report outstanding, but he too wants to see more spending. president trump: we will ask for payroll tax cut. we will ask for additional stimulus money, because once we get this going, it will be far bigger and better than we have seen in this country. kathleen: with the president behind it, we will see how far

it gets. the senate majority leader said last week nothing will be taken up until after the july 4 recess. even with the better-than-expected jobs report, there is still a sense that there is a lot of damage that has to be healed, has to be fixed, and that's why many people say juergen have to do more for the american worker. -- say you are going to have to do more for the american worker. does this move the dial for the fed at all? kathleen: not really. think of the last fed meeting and the press conference and every speech jay powell has given. we can do more, were knocking to think about taking the key reit -- key rate above zero until the economy is back on track. the fed can provide more stimulus. the mainstream lending facility going into -- main street lending facility going into effect. chart,an look at another

negative rates, barely disappearing especially after the payrolls report said maybe this isn't as bad as we thought, maybe the recovery will happen quicker. compare that to february before the pandemic started hitting and lockdown started in march, markets still expecting rate hikes. period withbrief the negative rate expectation and it is off the table. however, controls are seriously considered and i think people will ask jay powell about that too after the presser on wednesday. not only the key bond yields, but for the federal government. money,the stimulus costs it causes a larger deficit. the higher yields go, the more the government has to pay and that's why a lot of people say the fed should consider yield curve control. demand for u.s. treasuries will be tested. paper,ear paper, 10 year

we will see what happens be the yield curve has been rising and the curve has been steepening. . sophie: what else should we be watching when it comes to the economy and central bank? kathleen: around the world it , andbe much to see probably the same question, have we done enough yet? we will get china's aggregate social financing numbers and it will show probably the government, the people's bank of china have been spending more. they put the accelerator to the floor. certainly juicing things up. ppi is expected to be weaker. in japan, we got first quarter gdp revision, but you step back and look at that and at expected machine orders, producer prices, everything underscoring we had

two negative quarters for japan and a third one expected. industrial production in focus. 60% in april. even in the euro area, that number is expected to be down 18% in april compared to 11% the month before. i think weekly jobs claims will be again in focus because we are looking for signs the worst is over. will be labor market interesting to see again, if it underscores the sense that things are bad but not as bad as they were. there withleen hays a look at the data. lots more to come on "daybreak: asia." this is bloomberg. ♪

♪ china has hit back again on claims of the coronavirus -- a cover-up of the coronavirus outbreak, in a new white paper

saying it has active transparency -- transparently. what purpose does this paper serve? this outlines the steps and measures china took to stop the coronavirus. [indiscernible] now with almost 400,000 deaths globally, the pandemic has become a growing point of number of, with a countries including the u.s. and donald trump faulting china for the outbreak. in the white paper, while china does not directly point out the u.s., it says [indiscernible] -- seek to blame china. this is also part of china's broader efforts to defend its

actions and international standing. beijing has been sitting medical supplies and doctors to other countries and jie zheng pain has promised -- and the chinese president has promised to make available any vaccine. they continue to supply materials to fight the outbreak, including physical goods and daily necessities. sophie: turning to the diplomatic spat between china and australia, which has canberra looking to toughen foreign investment laws, china has issued an alert warning citizens not to travel to australia. how does this fit into the broader tensions between the two? selina: this is the latest sign of deteriorating relationships between australia and china, its biggest trading partner. a statementhed discrimination [indiscernible] and chinese citizens should be

on alert for their safety and not travel to australia. in australia, they said china's claims are false and they are welcoming visitors from all background. the downward spiral has intensified. prime minister called for an independent investigation into the source of the virus. in terms of trade surplus, china's trade surplus surging to a record in may. what is the context if you look nice -- look beneath the hood? selina: we saw a record trade billion,n may of $62.9 exports fell less than expected, bolstered by sales of medical supplies.

simultaneously we saw a slump in imports because of raising commodity prices. according to china's customs borough, the average price [indiscernible] volumesugh purchase were 5%. economy is slowly recovering from a, but we have an escalation of u.s.-china trade tensions. sophie: thank you, selina wang in beijing. looking at some lines crossing the terminal right now, regarding jd.com listing in hong kong. the share sale is said to be oversubscribed by multiple times, including the insta 10 -- institutional tranche. there on jd.com

listing in hong kong. let's get a check on the business flash headlines. atong kong stock offering 123 hong kong dollars per share, which could raise 2.7 u.s. dollars -- 2.7 billion u.s. dollars. they have a main the sting in the u.s. and makes a hong kong tensions.ng rising beop drugmaker is said to interested in a merger with american rival gilead. sources tell us this would be the biggest health care deal in history. over $100worth just billion. we are told gilead is not interested in a sale or merger. up next, gold prices at their best in years. can they force compliance? this is bloomberg. ♪

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♪ -- karina: this is "daybreak: asia." in new york city, the curfew lifted as it prepares to reopen businesses after the coronavirus pandemic. the mayor is calling on all protesters to seek health checks. the weekend saw some of the biggest black lives matter demonstrations across the u.s., most of them peaceful and arrests sharply down from previous rallies. meanwhile, minneapolis says it is beginning the process of dimensioning its police force in the aftermath of the death of george floyd. it is vetoproof and a city

councilmember say they will consult the citizens on what should happen next. someone was elected in 20 acting -- 2018 promising to mend relations. the prime minister of singapore says things will look different from -- different after covid-19. he said the city state will not return to the interconnected global economy from before the lockdown, and with unemployment rising and travel hammered, the future will be more tough. singapore spent the equivalent of 20% of gdp on its response to the virus. russia is investigating a massive oil spill in siberia, an --imated 20,000 tons of toil of oil leaked, about 100 kilometers north of moscow. is accused ofers making it one of the most polluted areas on earth.

president putin and other legislators only learned of the spill through to -- three social media. 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: let's look at the markets now. we are getting a pretty boy and -- pretty positive start to the week. jobs report, sing in addition to payrolls as opposed to expectations of a depression era decline. we are seeing gains in the neck a 225 of about 2%. the highest since february 21. the kospi at the highest since last february, adding about a quarter of 1%. in new zealand, gains extended to almost 2%. new zealand one of the out performers after -- air new zealand one of the out performers after the ceo said he did not rule out job cuts.

the economy in new zealand is coming online quicker than expected after their strict lockdown. anding at u.s. futures, s&p many futures adding about half like theent, looking rally will continue. sophie: let's turn to the oil patch. prices rising, rent topping $43 a barrel after opec and allies agreed to production cuts for an extra month. our reporter joins us from singapore. what is different about this latest opec-plus deal? stephen: unlike other deals in the past, this deal has a measure to ensure production cuts in may or june are met and laggards will have to make up the extra inductions from july 2 september to compensate. they don't cut with -- if they don't cut what they agreed to do.

and nigeria were not exactly squeezing supply nearly as much as they promised. this has been a bit of an issue for opec for decades, but it has come under bigger scrutiny now that russia and saudi arabia are pushing for folks to cut output and bring the market back into balance. with this stricter view on the market, there is an expectation that the cuts will be made and this could bring a faster rebalance forward. haidi: what are we seeing in terms of measures from saudi arabia to reduce market prices? seehen: not only do we saudi arabia be one of the most aggressive in terms of just cutting output, they have now come out with their pricing scheme for july am a they put this out every month and it is either a discount or premium to the market. what you are seeing is there july exports have jumped basically to the biggest price

increase for oil in at least two decades, doubling down on its strategy to bolster the oil market. in particular, the steepest jump will hit july exports in asia. this comes after march, where they had cut rises significantly to try and capture market share from russia. this move shows they are not at odds with russia, and also trying to shore up prices so the physical market follows in step and you see a rebound going forward. haidi: our energy reporter there. next, head of the one year anniversary of protest in hong kong, with the national security law looming, we assess whether the antigovernment movement has lost. this is bloomberg. ♪

♪ hong kong's government is promoting a message of stability, in particular for its currency peg, unbroken since the 1980's. this is as the territory tries to revive its economy. paul chan about the recovery. the year,ond half of particularly the fourth quarter,

this is hopeful. but it very much depends not number ourselves, but one, the coronavirus situation globally. globally if it is under control, a lot of economic activities can be revived. secondly, the relationship between the u.s. and china, particularly on the trade front, it would affect our foreign trade. when, at the moment, when we get the coronavirus situation under back to and society stable environment, we are going consumption our own , a $10,000 schema for every eligible hong kong citizen. >> people are still waiting for that. >> it is coming soon. >> that is a complaint from

local people, they've not gotten their check. why is it taking so long? you pay tax on the pay you earn, once a year. au also have astringent -- stringent data. >> more stimulus needed? where and how? >> we are working hard to roll out the stimulus package we have in the budget. these measures have to be rolled out before we decide on the third one. >> first quarter gdp was the worst on record. is that the worst for this year? do you have any reason yet you can give us that you might have to revise your full-year forecast again? 4%-7% forraction of the year, right? part update in august as

of the regular process. >> what are the tea leaves telling you right now? andt depends on externals investing countries. yes, we suffered dearly in the first quarter, but globally i think we are in a global recession because of the virus. >> are you seeing any indications of capital flight? speakures and facts larger than world -- louder than words. the hong kong dollar to u.s. dollar and taking has been on the strong side. there is no obvious outflow of capital. >> the local news shows signs of

people a little worried. local money exchanges running out of u.s. dollars, or lining up to get u.s. dollars or other currencies. that has happened in the past in times of crises, people seem to want to get hard currency. phenomenatemporary right now or an indication that there are some deep-rooted concerns in society? thisdo not believe phenomena is a result of these issues as such. say it is short-term anxiety. last year during the social turmoil, we saw a similar phenomenon. during those

difficulties, the financial market had been operating smoothly. again, there was no obvious capital outflow. the total deposits in the banking system at the end of last year compared to the beginning of last year registered 1% growth. months,in the past four i mean in the past 10 days, we did not observe any obvious capital outflow. sophie: that was hong kong financial secretary paul chan. let's bring in our guest. we just heard from the finance secretary discussing the resiliency of bank deposits in the city and hot money flowing in with some big listings in the pipeline. what are you observing in terms of capital flows and what potentially could derail this resilience? if we look at 25 years of

havery in hong kong, there rarely been incidents of mass capital outflows. that happened around 2000 eight during the financial crisis, but capitaly, hong kong's situation has been very strong and banks are continuing to see rising deposits. that's what we are seeing right now, as i think paul chan just said. the last couple weeks, we have seen very substantial inflows of cash into hong kong, which eventually pushed the hong kong dollar to the strong end of the means relationship, which they have had to sell hong kong dollar to keep the pressure off, to keep it from rising too high. at the moment we are seeing a net inflow of capital, not outflow. that is largely due to the numbers of listings coming into hong kong. chinesejd.com, a big

company and some others. in hitf companies coming those ipo's. sophie: we have seen authorities in hong kong would like to keep momentum around big deals for the city. that hong kong ,s to relax its quarantine rule 180 of the companies listed here like tencent. will we see more measures to boost investor confidence against the political backdrop that some lenders see? peter: there is a long-term history of that in hong kong where we have seen, for example, tothe period leading up 1997, there was a significant opening up of liquidity from china into hong kong. it really supported the

financial markets at that time. that thehe feeling encouragement of capital flow was designed to make hong kong look good at the time of the handover, which was a time of considerable uncertainty. i suspect we may see a little of that this time around as well. if we think about it, one of the big policy objectives for china is the greater bay area concept. this is a high priority in china policy. -- hong kong is part of the process. i'm expecting to see a lot of capital flowing into the greater bay area and hong kong should be a beneficiary of that, that would be my guess. expect thedo you national security lots of play out when it comes to the attractiveness or investment in business in hong kong? there seems to be attention.

a fair few number of voices within the business establishment saying anything that introduced certainty, removing violent protests from the street is good for investor confidence did on the other hand, it has been roundly condemned by major trading partners like the u.s. and u.k. peter: that's right. worldountries around the laws with regard to national security legislation and china is no different. the law so far as we've seen it is talking about punishing or of secession,s terrorism, etc. it is focusing on activities of foreign and external interference in hong kong. from a business point of view, that could be just about anything.

most foreign organizations and chamber of commerce and trade groups and so on seek to influence economic business policy in hong kong in one way or another to support business. be seen as an act of subversion? will business communities need withrect changes in policy regards to taxes and allowing businesses to operate? let's face it, every chamber of commerce tries to do that. that is a concern that these activities could be seen as a threat to national security. way, they kind of last raised the issue of national security with the steel industry and use that as a inpon against china threatening to impose conditions on china's exports of steel. national security was used there in the case of business and i think that's what the business community is concerned about.

jd, fore talked about example, but it is becoming increasingly clear that the capital inflows, the last bit from these chinese companies almost coming home. is there a concern about a reversal when it comes to actual foreign investment? is this the nail in the coffin after almost a year of protests and the economic decline on the macro front? peter: i don't think so. if we look at hong kong's financial flows the last 20 years, they have been largely dominated by flows in and out of china, and chinese exports and imports and so on. by chinesely driven business anyway. i think what is the major risk or concern is what you might call the nuclear option from the u.s.

if it blocks chinese banks from the global dollar clearing system and puts in curves of that nature, it could be devastating for hong kong and for china. are we likely to see the americans adopt that kind of policy? it doesn't seem likely at this stage. but the nuclear option is the one we most fear and that could be devastating not just for hong kong but for china generally. sophie: with several unknowns remaining, both businesses and consumers in the city, people attempting to negotiate potential outcomes, they are trying to find their backstop, insurance policies. in the property market, policy prices remain resilient as people look to the space as a safe investment during chaotic times. what else are you seeing when it comes to a financial exodus? are you hearing from businesses

that they are looking to shift operations or assets? peter: quite frankly, i think most families and most is this facinga number of years trade issues and the slowing economy in china, and have been putting in place what you would call insurance policies or plan b for personal finances or businesses. for example, with the trade war initiated by the u.s. against china, many companies are setting up other manufacturing bases in places like vietnam, india, indonesia, thailand and so on. to some extent, there will be some drain of expertise and capital from hong kong and china. i think that is happening anyway. i'm not sure we will see a massive exodus with this.

for example, last year, the american chamber of commerce did a survey in october, well before the latest security legislation, and something like 50% of the members who replied to the survey had considered moving out of hong kong or had made contingency plans to do so. the recent survey last week by the american chamber suggested 70% of people who responded to the survey were not considering relocating, but 30% were figuring on some kind of alternative, plan b, escape route one way or another. i don't see a mass exodus by any means, but i think companies and family send -- and individuals are putting in place an insurance policy of one kind or another. haidi: peter, we really appreciate your time.

we areake you to seoul, looking at live shots of the courthouse, where we are awaiting the arrival of the heir apparent to samsung electronics, set to appear in court today. the court will decide if he should be arrested for involvement in accounting fraud. this is part of cases in a contentious legal dispute day to back to 2015 over whether lee and samsung is a company used illegal means to take control of a conglomerate founded by his grandfather. we will bring you developments as they emerge a lot more to come. this is bloomberg. ♪

♪ a quick check of the latest business flash headlines. the anticipated winding down of coronavirus lockdowns is prompting a recovery at rental sites like airbnb. business had essentially shut down in march with people confined to their homes, but airbnb says the gradual easing of restrictions has brought a rise in demands for vacation rentals. the ceo says people want to get away but are not keen on taking a plane yet. british airways is threatening to fire all 4300 of its pilots

and rehire them on individual contracts. it is in dispute with unions over employment terms. they aim to shed 12,000 jobs as navigates jobs as it the coronavirus. rule forthe 14 day isolations -- in july. south korean financial authority's will provide 1,000,000,000,001 to keep the country's flag carrier operational during the coronavirus pandemic. issued as won will be early as this month. korean air had already received some funds to keep the carrier afloat through the rest of the year. sophie: let's look at markets this morning. the nikkei to for a sixth straight session, but a company stalling after a six t percent gain this year, the best-performing on the nikkei

and the biggest drug maker in japan. and so, the kospi adding about six tens of 1%. to index edging closer recovering from year-to-date .oss think you' u.s. futures this morning edging higher. topping 3200 earlier. stocks should be set for gains after sales rose in may the fastest pace since october. the offshore yuan holding a two-day gain at 7.07, looking to settle. that is it from "daybreak: asia ." our coverage continues as we look forward to the start of trade in hong kong and shenzhen i. this is bloomberg. ♪

>> it is 9:00 a.m. in beijing, shanghai and singapore. stories, asia-pacific markets start the week with gains after u.s. payrolls smash expectations and bolster hope this swift rebound. $20 trillion added since the bottom in march. oil rises as opec and allies agreed further output curbs. the new deal is lasting a