>> good evening. we are counting down to asia's major market opens. welcome to "daybreak: australia." believes they have overshot economic reality. continue to rise. u.s. infections are the slowest to rise, and brazil remains a

hotspot. australia's relations with china somewhere further. beijing is turning the screws on their $13 billion education there, saying studying may not be safe. we are seeing u.s. futures at the moment holding steady after we saw u.s. stocks finish mixed. the s&p 500, falling a tense of 1%, falling today after -- 8/10 of 1%, falling today after raising its 2020 losses. concerns that rebounds could be overdone. briefly topping 10,000 for the first time ever. apple, jumping on a report that it is preparing to announce a mac computers. take a look at the dollar index. we are continuing to see weakness. losses,ine sessions of

the longest losing streak since 2006. we have both seasonal trends and a dovish look. >> let's see how things are shaping up for asian markets. >> after seven-day gains for the kiwi stocks are edging slightly higher. we could see a lower open this wednesday across asia amid signs that the $5.6 trillion rally is looking stretched. more than half of the region's forecast they barely budged. there is more volatility ahead. honghing the boards, kong's concerns remain over capital flight. the bettinue to defend

that will collapse. agree, he warned the peg was over a year ago. holding above 108 ahead of the fomc decision. check out spot gold. a $70 range since april. goldman, seeing a push above $2000 for fully and if the fed tolerates above target inflation. >> let's turn to a deeper dive into the markets. our next guest is looking three to four months down the road beyond the fed's liquidity bridge. and founder ofio her company. added telling us you equities. where are you seeing opportunities at this point? >> thanks for having me.

we have found opportunities abroad. there were some assets in europe and asia that we picked up. this is ao not think by and full the environment. we still think you have to be noble and tactical. popou get 3%-10% position from the market melt up, you take it. it is not something that you go into it thinking you're holding it for six months, 12 months. nadine, it is really a market where you want to be cautious. where do you see tensions in the market where you still see opportunities given the valuations we are seeing at the moment? >> of the convictions we have grown overt we have the past month, we were a month

we were checking. what we see in terms of call purchasing is that it has a more risk-off mode. people are very much in it short gold. if you are talking about coming out long gold, we have been long gold. we think it is a great place. being long, having put and call actions have you nibbled to stay in the game in the past month. -- have enabled us to stay in the game in the past month. whether the markets are going up and down, it is that volatility we are monetizing. >> tell me about your conviction on gold particularly as we get expectations of continued fed easing and global bank easing around the world as well as this

sustained weakness we are seeing in the u.s. dollar at the moment. >> was still think it is a core position, but we -- we still think it is a core position, but we trade around the position. it's been an insurance policy for thousands of years. whether you're looking at the 70's, 2012, we are seeing more political risk. the fact of being known consensus. when you are flooding the quality and there is a lot of asnd out there, oftentimes we are seeing a dollar depreciate, other assets become more inflationary. or a hardbecomes, asset, oftentimes, it gets bid up, because our concerns about the power of their money. we like that fact in addition of

the fact that people are short gold. >> what are you expecting on the -- from the fed on wednesday? >> not much. it is a wait and see mode. we will look at the timing to the changes. onwill probably keep it the short end of the curve, which will not be a surprise for anybody. they really don't spend, they lend. it will come down to congress versus the fed for any economic drivers, we believe. wrongsk is that if the words are said, the longer-term rates rise, they could lose control of the long end of the curve, that would be a risk. the one area we are looking for is, they have to spread the needle carefully in terms of their confidence in the economy. confidence in terms of their power to control things. otherwise, investors make it concerned and control the long

end of the curve themselves. >> given everything the fed is doing, not to mention the fiscal stimulus measures, many people think this is going to be just like when happened to the economy during a national disaster. a really quick rebound. take a listen to what paul tudor jones had to say, the hedge fund manager. >> we have more cash now then we had going into the shortest recession in the history of the u.s. your not because it is not garden-variety recession, your garden-variety response of the fiscal monetary standpoint. a but deepest come shortest head to the u.s. economy. is this tracking the markets right now? >> actually think it is different. -- we actually thought it was different. we thought it was liquidity. when you are trading through that first quarter, at some point, not everything went down.

it was things that you would expect. it could be cyclical areas, high data areas to my leverage areas. by the end, gold was selling off, treasuries were selling off, because people needed liquidity. we see the past month and a half really being when liquidity was was at back in, there liquidity bounceback, but it does not mean investors are confident the economy has bounced back. valuations and the stock market have returned to prior levels, but there is a definite hit to employment, there is a definite hit to people's prospects in terms of the number of hours they work, the compensation they get per hour, so there is no way you can say this is a complete bounceback that is going to happen. past the about looking recession. been a structural change given the coronavirus. -- thankis so much for

you so much for your time, nadine terman. still ahead, after saying it is very rare for asymptomatic people to spread the virus, the who has backtracked, saying it is not so sure. and, australian mainland investment has pledged 60%. this is bloomberg. ♪

>> you are watching "daybreak: australia." floyd has been laid to rest in his childhood home of houston, texas as protests continue in the u.s. and around the world. he was member is a father, brother, and a force for change after his death sparked outrage.

he has become a global symbol of injustice. with mourners saying this could help change the world. plans record stimulus have tech of the coronavirus. fiscale set to max stabilization, but they expect matters to get back on track in the next 2-3 years. the government packages about $2 trillion. there is more evidence the pandemic is hurting japanese industry. machine orders are down 50% from a year earlier. orders were already falling before the virus, but the outbreak is having a deeper may shownd recent data resilience in capital spending. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries.

and karina mitchell. this is bloomberg. haidi? haidi: new data shows coronavirus cases in the u.s. rose at the slowest daily pace in march. meanwhile, the who was walking back comments made on monday that it is refer people who have the virus but do not show symptoms to then pass it on. get some opinions from max, who joins us. they said asymptomatic cases don't seem to be contagious. there is confusion whether this is actually the case now. max: yes. what this feels like to me is a case of one comments from a who official getting quoted come a than people sort of running away with it. what she was actually referring to was a comparatively small

subset of people who show no symptoms whatsoever and never show symptoms, as opposed to if you include people who have a phase where they develop symptoms a little bit more slowly, but then they develop symptoms later on. on those people, it is pretty well understood, they do have a good chance of affecting people. also that, made by the who about asymptomatic people, that small fraction of that particular group that never showed symptoms, it was based on relatively limited data. they renewed in their press conference today, they went on to say that they were not meaning to make such a definitive or especially broad statement about people being able to transmit while lacking symptoms, that it still appears to be well unknown to what degree of total transmission. mean that theat

risks are still high when it comes to these reopening's of states? new york continues to reopen its economy, but the silent spreaders could be an issue. max: absolutely. that will continue to be an issue no matter what. the fully asymptomatic people. when you consider that not everyone develops terrifically obvious symptoms, those things that you can catch with a screening, not everyone develops -- so the reopening's will always depend on how cautious they are, how limited, and the extent to which the broader economic activity is, measures like distancing, masks were to continue, to the extent to which places can track creases and isolate them, you actually catch those silent spreaders.

when you catch someone who has the virus and is unaware of it, tracking down people they were in touch with, get those people tested, and make sure that they are not potentially spreading it. haidi: and the ability to contact trace is becoming an issue in southeast asia, as well as a we are seeing this becoming a new hotspot. the fastest rate of infection. max: yes, that is an area i think is of particular concern. if you contrast it with new york, opening up only after a multi-month restrictive lockdown, south asian countries opening up quite broadly, we are still at a high level of transmission.

i think you have already seen the results of that kind of policy in the u.s., where you have states that opened without the degree of control and containment that new york has, and you are starting to see some early evidence of a sustained you aren cases that also seeing in south asia. something to watch. also areas where there are limited contact tracing options. going back to those comments of the who about a symptomatic cases, bloomberg spoke to johns hopkins hospital nurse manager -- spoke to the johns hopkins hospital nurse manager for her opinions on the matter. >> i do think that not having or having some validity that the asymptomatic appellation does

not transmit the disease is very important to the reopening process. shery: what do we still not understand? we have had various reports -- it is difficult, actually, if you are a citizen figuring out what you need to do. who should we listen to? we were told not to wear masks, then to wear masks in certain places. what are you certain about that we need to do to make sure that we are safe? >> iowa's talk about a few simple things. -- of them is wearing a mask i always talk about a few simple things, one of them is wearing the mask, social distancing, and sanitizing. we are beginning to open up for outpatients on a wider basis. we have tohe topics review, speak with the staff about measuring out six feet

apart so that we could really be social distancing for the importance. one of the things we have noticed is that the transmission that we have seen among inloyees, primarily, are situations where social distancing may not be as strict as it is in another area. we have really gone back to those basics of the masks, social distancing, and sanitizing. >> what it be safe to send kids back to school this month if there is appropriate social distancing? >> i think children are sort of the variable. it is difficult for children sometimes to understand social distancing at a level that adults can understand it. i don't know the answer to that question. there would have to be a lot of work with early childhood educators about how you could get the message clear to children and how they could do that on a consistent basis.

haidi: johns hopkins is supported by michael barr. bloomberg. coming up next, hong kong marks the one-year anniversary with more unrest. this is bloomberg. ♪

hundreds of protesters converged on hong kong's district to mark the one year against china's push for an extradition bill -- one year anniversary against china's push for an extradition bill.

this was a catalyst for the first protest. where has the movement gone from here? >> if you judge it by just the crowd numbers we saw yesterday, it seems like this was a much smaller group of a few hundred. they disrupted traffic on tuesday night. blocked off roads. police had to fire pepper spray. you saw similar scenes, there were a few dozen arrests made. if you compare that to a year ago, it was a much bigger scene back then. it drew -- it drew out millions of people and kicked off months of protests. this controversial national security legislation that china pushed through was raising more concerns about hong kong's economy with the mainland. you have to wonder where the movement is now. perhaps there has been some protest fatigue. pro-democracy is losing a little

bit of seeing, or there is something in the works in the near future. we just heard from u.s. senators urging the government to take in hong kong residents who want to flee the region. you are seeing more foreign nations trying to help in some way. they say some hong kongers are no longer safe living there, they are seeking refuge outside the region. there are proposed changes to immigration rules to make it easier for hong kongers with national overseas passports to seek refuge in the u.k. carl bass is outed again, a new but against the hong kong dollar peg. >> he has long said it is doomed. now reportedly, he is doubling down on this. sources say he is starting a new fund that is going to make an all or nothing wager on a collapse of the peg. he is using option contracts to leverage the new fund assets by

200 times. it is the signed to get big -- it is designed to get big gains, but investors could stand to lose other money if the peg is still intact after 18 months. still unclear how much money he has raised for this strategy. this is another issue straight even for kyle bass. we also heard from other investors over the hong kong va investor, one of the largest shareholders, say it is uncomfortable about the decision to back china's national security law. the cio, saying he was uneasy at the bank's decision to publicly support the law without details of it and how it will operate in practice. >> we have breaking news at the moment. that they hearing timese offering 365

covers and they will raise the net 20.9 billion hong kong dollars in their listing. we were seeing more analysis. this will provide funds that can be use for investments outside china. we are now getting the latest that they will raise a net 20.9 billion hong kong dollars in their hong kong listing. ne, this comes at a time where the focusing's to be on these tech companies -- the focus seems to be on these tech companies. >> especially given the fact that the tensions between the u.s. and china are hating up. you -- are heating up. you have the government of the u.s. looking at threatening companies to de-list. you're seeing chinese companies seeking refuge in hong kong with secondary listings. it will be a boost for the benchmark.

>> we will have plenty more to come on "daybreak: australia." this is bloomberg. ♪ save hundreds on your wireless bill

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surprise me. just ask "what can i say" to find more of what you love with the xinity voice remote. >> you are watching "daybreak: australia." coronavirusindicate cases in south asia are increasing at the fastest rate in the world. infections are up 17% in india. 19% in bangladesh. salvation and latin america -- south asia and latin america are seeing the most infections. kuwait has become embroiled in the search of the man behind malaysia's 1mdb scandal.

allowed foro kuwait his arrest and -- a love for the he hasfor his arrest and no ties to the country's prime minister. a palestinian authority is threatening to the clear and independent state if israel presses ahead with annexation plans for land in the west bank. israel aims to claim the strategic jordan valley and settlements in the occupied territory. the prime minister says such a move would have "serious ," with further tension between the two sides. harvard university is hoping to cut cost by offering a range of options -- cut costs by offering a range of options including shorter working hours. they will extend pay and benefits for employees who have

been idle during the coronavirus pandemic. are assessing how to resume classes after the pandemic. >> investors are wondering if jay powell may change course. kathleen hays is here. kathleen, it was a huge surprise. does it really move the needle for the fed this week? >> certainly lets them go into letseeting -- it certainly them go to the meeting. maybe we will get through this, shipaybe if there is no v recovery, we are going to come up the other side. i think the fed goes into it thinking it is far too early to do anything that applauds that record 2.5 million person rising payroll when they were supposed to fall by 7.5 million.

and to realize what we are doing so far is working and we have nine lending facilities. we just revised the main street lending facility to make it broader, more helpful to smaller businesses. it is not time to make a change there. , you can see that on this chart, that is the blue line, they are down to a million, 1.8 million. that is dozens more in terms of how much greater that is in the weekly jobless claims number. millions remain unemployed. in terms of what we expect from the fed, bloomberg economics says they will remain dovish. here are some of the things they are talking about. first of all, great action, no atees in the rate -- r action, no hikes in the rate. it is 13.3% right now. another thing on what to expect,

policy guidance will remain vague, they will not signal change anytime soon. they will also consider the yield curve. maybe they will have to say, we will let you bond yields -- we will let bond yields go above a certain level. in terms of the assessment of the economy, do not expect much change. job losses are huge, the economy is still weak. when it comes to inflation, this inflation, prices low and falling as far as the eye can see. that is what is on the mind as well. another thing, traders are plot guidanceot very closely. number six on your screen right now. if the dots change to show more hikes down the road, then it will be a sign that maybe the

fed is not quite as dovish as we thought. if the plots stay flat, not bond tradersses, are not going to make any rate changes anytime soon. also, if you are a bond investor, you are waiting to see if they change the way they are purchasing bonds. move to a monthly move. those are two things that are begun traders' list. headlinesng making has been the black lives matter movement and the demand for socialequality, in both and economic outcomes. will this play into the fed's meeting? >> i assume it will be part of their discussion. jay powell, when he has given his virtual addresses, on

virtual panels, has talked about the fact that it's low-wage workers, who are at least well-positioned to withstand the impacts, the layoffs from the lockdown, they don't own as many homes, the wealth does not compare to wealthier workers, there are more black and hispanic workers in those lower are whitethan there workers. over time, when the fed has been urged to keep rates low and let the economy run hot and let inflation rise, people have said, if you do that, we are going to see black unemployment fall. it has always been a big spread between black and white unemployment. then of course, the fed recently , and conferences, and town hall meetings across the country, they have started to realize inflation is not going up even in a hot economy, so maybe we can let it run hotter. this is what we may say, that the fed will reinforce this view

where they are not going to begin to worry about inflation for a long time. right now, the big challenges growth. -- challenge is growth. >> we will have full coverage of this week's fed decision from 2:00 a.m. thursday morning hong kong time to 2:00 p.m. wednesday in new york. >> next, iron ore future, above the $100 mark, is in question. holdk dan hynes if it can above that key level. this is bloomberg. ♪

mixed techeeing a sure in the -- picture in the futures market. let's turn to sophie. sophie: asian futures are looking mixed. we could be looking at a subdued open this wednesday. treasury futures, taking higher higher ahead of the f1c decision. most economists say the -- see the central bank holding off major action. they will keep upward pressure on the debt to gdp ratio. taking a bigger picture view, the nikkei is about 2.5% closer to erasing its year-to-date

losses. kospi, close to turning positive for the year. among the stocks are most expensive in asia. we are seeing a pickup in the indicator, jumping to a record indicating complacency for the rally that we have seen for that since the low hit in march. focusing on iron ore, we have seen prices gaining ground since china anding from supply challenges in brazil. going forward, the trajectory for prices will hinge in part on if they meet targets for the year. >> let's stay on iron ore. australian miners are set to cash in on the prices.

our next guest says the press rally looks increasingly stretched. daniel hynes joins us now in sydney. great to have you. tell us about how you feel in terms of the sustainability, depending on where they can make up on the loss of supply? >> it looks relatively fragile to me. the supply issues are real. up until this point, we have seen them struggle to restart operations. clearly now, the pandemic in brazil is reaching a critical level. inare seeing some disruption operations now. the risk of the market.

a rather transitional short-term issue. , certainly forward into the back end of the year, i can see not only the risks around disruptions in brazil, risk from the reopening of operations related to reopening faster. and bottle making operations, improving efficiencies. -- bottlenecking operations, improving efficiencies. me, the supply-side issue looks relatively strong. that is going to come against what i think is a relatively

subdued global picture. , when you look at the issues globally, countries like japan, india, south korea, europe for the steel market, i think china can make up for the weakness. a prettyltimately see soft steel market in the second half of the year, which will weigh on profits. >> what do you see when it comes to steel production in china? we have seen expectations and forecasts raise on that front. reasons as weal see the chinese restarting their economy and start to produce more. they havely, highlighted infrastructure spending is part of the stimulus package, but this has been an

ongoing thing for a couple of years now. we have not really seen a sustainable pickup in successor investment. i think the market is probably overestimating the amount of growth we will see coming through from that sector. certainly, it is likely we could see it in the double digits, but i don't think we are seeing a 20% gain in infrastructure spending over the next 12 months. i think it is going to be more 10% growth. it will help in the shorter term. that will not make up for what we are seeing globally. it would have to be a pretty significant pickup in infrastructure spending. in infrastructure spending to really make up for that.

>> what about a further pickup when it comes to gold? another see gold have like higher from here? say in, it is hard to the immediate term, because suddenly, it is turning positive -- certainly, it is turning positive. we see economies reopening. but i do feel that central banks around the world are steadfast on continuing to provide stimulus into the economy. we will see them push it , forficantly further longer than probably required, particularly considering inflation is relatively low across the world. sort ofpect that monetary easing we are seeing is going to be long going -- a long

going payment. there are some concerns about economic growth over the medium to longer term. eventually, those tailwinds will kick in and we will see gold continue to rally that has been ongoing for six months or so. >> what does that mean for other precious metals, like silver? >> silver has always outperformed. if you are looking for an extra performer, that is the one to focus on. it does come with a premise that when we see the pullback and the it tends to magnify the losses, as well, but that is your level of risk appetite. that.l see >> what do you call a stable

level when it comes to crude? we gete a risk that if further out we are going to see for the resumption of shale coming back in? >> that certainly worries me. ceos from shale companies in the are ready to turn it back on, but when i look at some of the data, there has been pullback in uncompleted wells. there is no huge backlog of wells ready to reactivate. but certainly, the ones that , they will to shut be able to get beefed up relatively quickly. i think that will place a little bit of a constraint on a processes. thee saw wti push into

40's, i would suspect the industry would create a little bit of concern in the market about the potential reactivation to u.s. supply. there is geopolitical tension affecting commodities. at what point do you start getting concerned that things like iron ore and other commodities [indiscernible] to china? >> if you look at commodities specifically, china would be metaphorically if it started to put pressure on ore, whichke iron on supply.y reliant

overall, i think it does create a certain level of concern within the marketplace. i think investors are watching it very closely. i get a lot of questions about what this means for the commodity complex. this is keeping an eye on it. i think that will create the sort of level of uncertainty in the market, which markets never like. hinderimately, it could the overall economic recovery that we are expecting to see out of this crisis. it is going to be a headwind, something which investors will become increasingly concerned about. >> always appreciate your time, dan hynes, in sydney. we will get more about the tensions between china and australia just ahead. why china is now asking their

students to assess the risks of studying in china. if you are away from the screen, you can always find in-depth analysis over on bloomberg radio, broadcasting live from our studio in hong kong. you can listen at bloomberg radio plus or bloomberg radio.com. this is bloomberg. ♪

chinese relations are continuing to slide. studying inning of the country due to racist attacks. this is pretty significant going into services and that a time that we know universities are really struggling with the travel restrictions. >> yes. this is a big one, haidi. the education is worth $30 billion to their economy. last year, there were 200,000 chinese students in australia. when you compare that to the other retaliation we are seeing, billionrts of about $1

targeted, that is what about the same. this is a big lego. -- this is a big leg up. the spread of covid-19 has not can effectively control. during the epidemic, they were discriminatory incidents in australia against asians. the australian dollar fell 1% on that statement. australia is pushing back on the claim. education minister says australia has had a lot of success in flattening the curve of covid-19. the trade minister is saying none of us have any basis in the fact in terms of the racial dissemination. turn continue to see china the screws on previous economies. tensions have been going on for months. >> this has been a slow build. you can go back to 18 months ago when china begin that probe into australian vale exports.

more recently, we had a string via calling for the independent probe into the origins of coronavirus. last friday, australia introduced tougher screening for foreign investors when it comes to buying assets. there has been a slow build on both sides. it just gets more and more tense. the chinese ambassador warned of exactly this kind of thing happening. it is likely other products will be targeted next. this has been going on for a while. he had numbers released on tuesday that show chinese investment phone -- fell by more than -- we had numbers released on tuesday that show chinese investment fell. a quick get now check of the headlines. hsbc and other charters are being reviewed for their support of china's sweeping security laws for hong kong.

david cummings says he is the decision to back the legislation without knowing exactly how it will work. he adds if companies make political statements, they must accept the corporate responsibility that follows. boeing fails to deliver, highlighting the depth of the coronavirus crisis even as their stocks soared. shares are up 75% since they start of the since the start of me. since the start of may. gains afternnounced posting a decline, with sales falling 45% for the quarter in may 2.

-- on may 2 through the company has secured $4.5 billion in new financing to see through the coronavirus crisis. we had u.s. stocks taking a breather on worries that the recent rally has gone a bit too far, too quickly. trading in new zealand, down for about a 10th of 1%. the kiwi dollar, weaker. 1.4% lowerwe have when it comes to sydney futures. declineng a 1% into the cash trading session. there are concerns that rally has gone too far. up about 27% so far. early seen as a proxy for risk appetite. we breakdownt, korea's latest numbers and the economic outlook, next.

plus, the british chamber of commerce will be discussing prospects of the china free trade deal.

>> welcome to "daybreak: asia." i'm shery and in new york. to there counting down markets. the top stories this summer. concerns the global rally has overshot economic realities. the nasdaq, slightly topping 10,000. in u.s. a strong rise crude inventories.