jinping's help to win reelection. trump calls his former national security advisor a liar. coronavirus cases rise in china, brazil, and several united states, while optimism about additional stimulus fades in the market. and the bank of england is expected to boost bond buys by 100 billion pounds today as investors watch for hints on curve control. the decision is at noon london time. good morning, everyone. this is "bloomberg surveillance." i'm francine lacqua, here in london. tom keene is in new york. the market is focusing on the rise in infections when it comes to covid-19, but we have the bank of england and a lot of economist expect the bank of england to do quite a lot, a second shock and awe package today when they meet on interest rates. tom: i agree, francine. the bank of england deserves study. any wonder if there will be a reaffirmation or discussion on the likelihood or chance at the

moment of negative interest rates as well. as you leave the hour, francine, the united states -- excuse me by theington transfixed battle between the president and mr. bolton. it has changed overnight into new legal action by the president. francine: nothing like an injunction to sell a new book. let's get straight to bloomberg first word news in new york city with ritika gupta. take a coke china is vowing retaliation for u.s. -- ritika: china is vowing the government of the u.s. has set --, sanctions for any oppression of uighurs or muslims. john bolton's book says the president -- meanwhile, bolton also wrote that president trump asked xi jinping to help him we reading

-- help him win reelection. thevastating betrayal of president's foreign policy. president trump called bolton a the book tos asked stopping publish. economists predict the central bank will expand its bond buying program by 125 billion dollars. meanwhile, investors will watch for any hint of radical policies such as negative interest rates or yield curve control. the boe decision will be announced at noon london time. a new report says the coronavirus pandemic could wipe out more global wealth than the financial crisis a decade ago. as much as $16 trillion of wealth could disappear. plus growth could be slowed for the next five years. the report says the biggest losers could be rich people in north america and japan. global news 24 hours a day, on air and at quicktake by

bloomberg, powered by more than 2700 journalists and analysts in i amthan 120 countries, ritika gupta. this is bloomberg. tom? francine? tom: very quickly on the data, equities, bonds, currencies, row,dities, two days in a a real turn to the market, a roiling feel with equities turning with the vix near 33, maybe at times near 34 levels on the vix. also the yield space very quiet, now -- not over two days but over the last three days. francine: i have a similar data check to yours. i wanted to look at what we saw in renminbi. at 7.07.at 1.7 -- one -- the youan isked up because -- that

$4.2 trillion. we will have plenty more on pboc and some of the market shortly. let's get an update on covid-19. the coronavirus pandemic continues to ravage states across the southern u.s. as new york city moves toward phase two of its reopening on monday. beijing continues to see china's dream isreup since -- now is a special envoy for -- thank you, professor, for joining us. when you look at covid-19, first of all, isn't mutating, and is that why it is beijing, or is it the same virus that has just come back? >> i think it is the same virus that has come back. here is the situation. we are expecting there to be resurgence is. this is very much in the game plan. but what will be necessary this time is that nations are able to close down these resurgence is and suppress them without it requiring the whole lockdown of

an economy. that should be possible. provided that people themselves know what they have got to do to reduce the risk, provided that you get good quality public health services functioning right across the country. you can deal with his virus and keep life going, despite the fact that there is a constant threat. francine: what does it tell us about how we should reopen our economies? are we learning the best way to do this, given the resurgence is in section? david: i think we are. just to stress, i really don't think we have got a mutation right now. we have just got a problem of a virus that is capable of coming back, re-invading societies very quickly. so we have to be prepared for it, and we have to defend against it. some countries are doing this really well. , do see good progress in china

and south korea, and singapore. i see excellent progress in new zealand, good progress in india, strong and germany as well. but many of these countries are seeing small resurgence is. they are just dealing with them really quickly. the countries that concern me more are the ones that perhaps are not conscious of the fact that this dangerous virus can come back, that they are pretending that life can go on as normal. i think they are the ones where much morems could be serious. within the world health organization and other bodies, we are encouraging all nations, take the virus seriously, get your public health services ready, make sure every single individual knows what they have got to do in order to reduce their risk. -- bey local and get the ready to act locally, and then we can get on with life and keep the economy going. nabarro, you are a

modest guy, and it is no question that you are the top guy in the world in the trenches, including the canal bombing in 2003, you worked on malaria, you worked on ebola. speak to our audience right now about the efficacy of the budgets of the world health organization. great for us, give us a judgment, please come on how those -- grade for us, give us a judgment, please, on how those moneys are spent. thank you very much indeed. the world health organization brings together medical and public health professionals from all over the world. 7000 of them in various different roles, in 100 something different offices, six regional hubs in geneva. total budget of this organization, one third of the united states centers for disease control.

it has asked to deal with -- it is asked to do with every -- it is asked to deal with every disease under the sun. i have been there. i have worked for the organization. it does not waste money. in fact, it is ridiculously underfunded given the scale of the problems it is asked to do. healthint, we do world in a political context. occasionally our owners, the different countries of the world, are not getting on for some reason or another, but we continue to operate despite the political buffeting that occurs. but it is quite difficult right now with people basically saying we have failed and we are not useful, because we operate within the rules that are set for us. and i believe that we are doing ok, but the challenges at the moment are absolutely massive. i would ask everybody not to be withdrawing money from the world health organization just when we

are right in the middle of supporting the world dealing with the worst public health crisis i have ever done. nabarro, telus the difference in environments here of this virus versus sars -- tell us the difference here in environments of the -- verlander's -- in -- what does it mean for a given core african nation? this virus is certainly much more unpleasant than influenza. virulence is slightly greater. it is persistent. it doesn't seem to be weakening as the months go by. also, we were hoping that it would be much softer in its impact on poor countries. but if you adjust for the

different age factors in poor countries, it seems to be just as bad. it is a global phenomenon. i have been looking at the statistics with 8 million reported cases. do you know where the numbers of cases are increasing? , india, asia bangladesh, pakistan, indonesia. it is in latin america, in brazil, mexico, and other latin american nations. it is just getting into africa, as well as in the middle east. this is a virus that is affecting poor people, particularly affecting poor countries. they have not got strong health systems, so as western europe and the u.s. seem to be doing better -- though the u.s. figures are not good right now -- the real challenge is in the poor nations who really don't have the spare cash or the health service capacity to deal with this problem. and i worry a lot about what is ,oing to happen in six months'

nine months' time as the virus moves across poor nations. are they going to have the cash reserves in their national budgets both to look after the people who have been affected and also to deal with the businesses, particularly the small and medium enterprises that really are turning toward bankruptcy. francine: david nabarro, thank you for the briefing today. world health organization special envoy for covid-19. coming up, we speak with ed bastian, delta airlines chief executive officer. 6:00 a.m. in new york, 11:00 a.m. in london, and this is bloomberg. ♪

ritika: this is "bloomberg surveillance." let's get the bloomberg business flash. several british firms with ties to slavery have apologized and planned to pay reparations. they will make payments to projects supporting black and ethnic minorities, according to the telegraph. royal bank of scotland it will make a similar payment. promising to hire more black workers at senior levels, setting a goal of 30% of at google. less than 4% of google workers are black. shares of wire card are plunging today after allegations about its accounting. it has delayed its 2019 report

again, after finding indications of serious balance applications. that is the bloomberg business flash. tom: thanks so much. "bloomberg surveillance" from london and new york. we are going to take a break here and come back with john normand of jp morgan and get a summation of where we are. the markets are roiling right now. we will get a view from mr. normand. we will do that in a bit. again from london, again from new york, this is bloomberg. ♪

francine: this is "bloomberg surveillance." tom and francine from london and new york. the picture of the markets remains complex as investors continue to weigh an increase in coronavirus cases against optimism about stimulus measures. joining us now is john normand, from jp morgan. good morning. when you look at some of the things the market has been focusing on, it is definitely monetary and fiscal stimulus. how do you view the complex situation with cases surging covid-19? forces areof the quite positive because you have monetary stimulus in play. there are suggestions that the policy could be upside as well, the data moving up, leaving the coronavirus issue to me as more of a wildcard than anything else. obviously the infection rates

are moving up in a lot u.s. states, and importantly some large u.s. states, but the rate of infection, the rate of growth of the infection is modest. it does not raise an immediate threat of lockdown. it is right to view -- it is right to view it as a risk factor, i just don't think it is a dominant factor that it justifies turning defensive or negative on markets. francine: where do you see the most value among asset classes right now? amount ofe is huge value. if i think about where there is modest value, there is modest value in credit because of the long-term average, and central banks -- there is modest value in equities, even though pe's are fairly elevated because i think the business cycle is going to continue mobilizing over the next few quarters. i think there is decent value in dollars because the dollar is

the defensive asset that is still fairly expensive. atside of that, there are number of em assets in currencies that are fairly cheap. more on the e.m. complex and the cheaper currencies. for ushn, translate you're very, very complex notes written jp morgan about what the asset classes and particularly fixed income and foreign-exchange signal for the equity market. you just said equities are constructive here. how do you take those signals to get to a constructive view on equities? me, the big signal out of fixed income markets is there will be financial oppression over the next few years, meaning massive central-bank purchases that offset these exploding deficit figures and issuance. so low rates is going to be the norm for a very long time, one

less thing for equities and credit that you have to worry about as a potential disruptive force. the signal i am not taking from fixed income is that growth is going to be underwhelming over the next couple of quarters. remember, the rates markets are managed markets, and they are managed through qe programs, so there is not a lot of signal in terms of strength of the economy coming out of the dollar market, where you're getting the signal about policy commitment keeping rates low for a very long time. fundamentally supportive for the risk complex. tom: what is the price, john normand, of the greek letter theta on these low rates forever? there has got to be a cost somehow of over leveraging or recurrence equations that go up two years, three years, four years, through this and this cheap money. what is the price of that? inn: that price to me comes different forms with different

countries. it can come in higher inflation, as a fewan make it years in the developed economies but you will not get that in the next one or two years. you will get solid stress and credit events, but those are more related to some of the emerging markets as high debt to gdp radios and high deficits. where you will get more of the cost yield right now is through fx. if central bank rates are going to be zero for the next few years, if inflation is still positive, negative real interest rates in places like the u.s., that is problematic for a country like the u.s. that runs a trade deficit. it is hard to attract financing without appreciating the exchange rate. you will get mild to low volatility payback where the high debt is mainly through currencies right now. it is also through a higher gold price. inflation andnd sovereign credit events -- that to me is more distant for

developed markets, and it is only really happening in a handful of emerging markets right now. francine: where do you see the dollar heading, john? john: i think it is going lower. for me it probably only deserves -- not a very large decline when you consider what typically happens to the dollar at the end of a recession. at the end of a recession, betrayed rates are might -- the trade rates are much more substantial. the non-us world is not that attractive in terms of u.s. interest rates -- in terms of interest rates and in terms of relative equity returns. the u.s. give the best equity returns because of the dominance in the tech sector. of -- that implies kind on the balance of the weaker

dollar, 2% to 4% trade rated. versus mexico, russia, some parts of asia, it will not be across-the-board the board as it has been after previous recessions. francine: what do you think the fed will do next? some argue that they are already endg control on the front of the market. will they actually go heavier with that? john: i think what we have to watch is kind of an implicit credit spread crawl. the fed loosening financial conditions, it cannot really do much in an environment of low treasury yields. it cannot compress -- what he can do is compress. -- is compress credit premiums. that is not an exclusive objective of the fed, but i implicit one.s an the growthe of what

cycle doesn't with a profit cycle does, i think there is more to be done on the credit side, not necessarily the government bond side. francine: john, thank you so much. john normand of jp morgan stays with us. starting monday, we will bring you the biggest names across finance, investing. including steve schwarzman. ubs asset management -- that is monday, one a clock p.m. in new york, 6:00 p.m. in london. -- 1:00 p.m. in new york, 6:00 p.m. in london. also david rubenstein and bill ackman. this is bloomberg. ♪

>> we have the potential of making 2021. we are celebrating our

bicentennial. it could be a bumper year for greece. so far, if i look at market reaction, people feel comfortable with greece in the sense that we spend enough money to soften the blow but not enough to derail public finances. that was the greek prime minister. greece, one of the lowest infection rates in the world, keeping the deaths below 200. they are sticking to their reform agenda. europe,en you look at is there too much hope on this plan the commission put through? this is money states desperately need.

john: there may be too much hope this will deliver a higher better rate of growth in the region. don't think there is any optimism on it being able to contain the stress. givenng approved by eu, considerable ecb buying program ,n the background, it is also the precise size is not so important. questiona much bigger around the growth model. none of that is touched by the recovery fund. it will be a country by country decision around regulatory policy or structural reform issues. tom: today we will be riveted by a bank of england, many others, particularly europeans fear,

weighing in on whether negative rates have been an instructive experiment. cost and measure benefit in net terms. benefit at the financial conditions have had to the economy as a whole, rather than just on bank profitability. by large, it has been a good experience for europe. say it is a good experience forever. people may have a different assessment. so far, so good for europe. i would not count on this being the remedy for better growth long-term. there are limitations. tom: interesting.

good advantage to have john with us from jp morgan. simple. generous terms, 1.3 one trillion euro. ultracheap loans. ecb money to support banks. fine butan, that is where does it go from there? into businesses for investment and job formation? john: probably not initially. risk andntain rollover default risk. financial conditions never tighten that much because of the financingty of repo from ecb. one less source of stress on the real economy.

it will not promote significant step ups in lending if unemployment is high or corporate balance sheets are overleveraged. excessive to be overly critical. cheap lending is not a sufficient condition to generate growth long-term. francine: thank you, john norman. ritika: john bolton has come out with a devastating portrayal of the president's conduct of foreign policy, writing that the president asked xi jinping to help him win the election by buying more u.s. farm products. the administration has asked a judge to stop the publication. debate apublicans will

police reform bill next week, banning the use of chokeholds. mitch mcconnell will need the support of democrats for the measure to advance. chuck schumer says the bill needs improvement. a high-level meeting in london today as brexit trade talks are at crucial stage. with johnson will meet emmanuel macron, calling for fresh momentum in those negotiations. britain needs a trade deal to avoid an economic shock. global news, 24 hours a day, on air and on quicktake from bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. ritika gupta.groum

this is bloomberg. bloomberg's commitment to july,ston pops, fourth of for those of you in england, that is independence day here in the colonies and it has been adjusted this year. look for that. this is bloomberg. ♪

>> he broke the law. simple. as much as it is going to be broken. this is highly classified. the highest stage. highly classified information. tom: good morning.

hannity,dent with sean making clear in the last number of days, he is not a journalist. tucker carlsen doing very much and opinion program for our international audience. joining us now, martin, our chief content officer on what i am calling the bolton papers. you remember, 7000 pages, 47 volumes of the pentagon papers. the presidentn, mentions, is this classified material? no question about that with robert mcnamara's effort with those military officers to put together a history of vietnam. martin: the courts will have to decide.

foron gave his book security clearance and they drag their feet. cases, this is the eye of the beholder. tom: we will let you clear your throat. martin: sorry. tom: things change. a litigious path by the president. huge shiftast night, of gears. many people, somewhat balanced, including the good law professor from harvard, were scathing. this morning, must-read from professor feldman, i will not read it, it is simple, talking about frivolous loss. will this get decided today or do we have to wait until tomorrow? martin: excerpts are already

out. tom: you have it by your bedside? martin: that is right. [laughter] mention of the pentagon papers, you recall, published, of, priortried, sort restraint on national security issues. since the cat is out of the bag, a court would find it difficult to prevent publication, scheduled next week. they will seek expedited hearing and probably get it. francine: we understand, good morning from london, and this book, john bolton, basically says, donald trump asked the chinese leader to help him with reelection. will that change opinion of the president by some people in the republican party? martin: i very much doubt it. he has a base of somewhere

around 40% of the electorate for whom he can do no wrong. saying the he is book is full of lies, officials in the white house a really not -- are really not saying specifically he never said this. donald is very transactional. it does not seem illogical he may have said something like that to president xi. i don't think it will have any impact in the trajectory of the election where he is under severe challenge, as we speak. francine: could we see investigations after the publication? casen: you could make a offering/asking for help in election campaigns from a foreign leader is essentially what got him impeached in this

ukraine situation but i don't think anyone in congress has the appetite to launch an in-depth investigation. don't forget, john bolton, before he came to the white house was essentially a rogue and considered off the reservation before entering the white house. you have to put that into context. us on how, brief foreign policy matters matter the first tuesday of november. any history that people vote based off chinese policy or off the national security council or off ukraine-russia affairs? martin: good point. elections, tim o'neill said all elections are local, it is really what is in people's personal

lives, financial lives, do they have jobs? are they better off than they were four years ago? i doubt anyone will vote for one candidate or the other for their views on international policy. muchcans are parochial, more so than any of the other countries around the world. it is local issues that will decide this. francine: thank you so much. we speak about emerging market research, a little about brazil, a lot about china. this is bloomberg. ♪

>> even if we manage to get out of this that 95% of what we were, which would be good theome in a year or two,

rest of the world will not be in that situation. they don't have the money to do stimulus, to keep people sheltered in place, the resources for the collapse in oil prices, global trade. 6 billion people plus living outside the advanced economies. they have been thrown off the track they were on the last four years. -- 40 years. this is a huge issue coming up and i don't know how we will deal with it. ff on fire theogo other day on bloomberg, cautious on em. murat is the electrical engineer out of istanbul who has had a em starting asin a young economist at deutsche bank a trillion years ago.

surveye a sentiment which judges the panic of em. how in a panic is financial emerging markets as they look at this economic contraction? murat: thank you, tom. this survey was conducted among investors from 198 institutions, billion, the$600 second half of may/early june. less than a quarter of investors are bullish. em prospectssh on in the next three months. they hold large amounts of cash. over 5% cash in portfolio. positioning is defensive. , they areeign credit

overweight. the rest, including equities, is underweight. rogoffe distinction dr. makes, is that em economies don't have fiscal largess to help in economic slowdown. if they don't have trillions of dollars of aid, where do they get a system to create demand? murat: good question. that is sort of in our survey as well. it really becomes distant across regions. att investors look relatively comfortable asia, in the forefront, the region with largely domestic savings, more international reserves and more stimulus capacity. this is in contrast to latin

america, for instance, which appears to be less stable. most countries have constraints on fiscal capacity. francine: good morning from london. i am looking at your sentiment survey. quite a lot of the people surveyed are holding onto cash. what needs to change for that to be different? murat: that is correct, good morning. you are right. surveyed areors holding in excess 5% cash in portfolio, a relatively large amount. down.d pin it investors are the looking for local economies to recover from the shock and the second half of this year. de-escalation.

high cash levels could be seen as opportunity. once they feel comfortable, they have cash to deploy. they need to be feeling more comfortable about recovery prospects of the global economy, emerging markets, to put cash to work. francine: what will that take? the number of infections down? reforms? animal spirits of global economy? murat: good question. a combination of all. expertise.ence, we did another report a couple were back and found out em already losing momentum before the covid shock. there was a fall in productivity, lack of investments, in certain cases, structural reforms.

the global environment is not supportive for emerging markets. , they have tots focus on how to boost financial growth. the key recipe is in the reforms. the fiscal side, health care, labor markets. solution, dr., has always been depreciation and evaluation of said currency. is that the solution again? loosening financial conditions. best fed, but also the in the survey, it is true investors expect em depreciation, 44% are looking for. two thirds of investors are

expecting rate cuts from central banks. we have seen it from brazil and indonesia. tomorrow, we have russia, where expectations are for further cuts. at the same time, loosening financial conditions, terms of borrowing by cutting interest rates, at the same time, currencies are adjusting to the environment, should help. francine: thank you so much for joining us. looking at what markets are doing, focusing more on the number of infections around the world. cases increasing instead of looking at monetary policy. i want to show you. renminbi fluctuates on the back of what we heard from the pboc, the governor saying he wanted the flow of credit to increase

to $30 trillion. yuan, $40 trillion trillion. the roiling of the markets. i have that in the opening script. interesting, folks, to see waiting for the next news item, what the pulse is off the pandemic, the economic contraction. don't forget, thursday, weekly jobless claims, 8:30 a.m. covering that further. far more after that, conversations with people about the collapse of industries or even industries doing better. one that is not is the airline business. this will be an important conversation, certainly, jermaine, to all within global wall street. conversation in

with mr. bastion of delta, right outside my home, i can see that lga, ituttle, dcaa to is not there. hourly flights of delta have evaporated. moving people around again, doing business in america. we will get updates. stay with us. another hour of bloomberg surveillance. ♪ save hundreds on your wireless bill

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roiling markets, up and down in a frivolous way, 8:30 a.m. weekly claims of new and continuing unemployment. nothing frivolous. the second half of 2020 beckons. will it be about making money or not losing money? in the dark of night, all the president's lawyers attempt to halt the publication of the bolton papers. consider "aerg must lawsuit worse than frivolous, and assault on established law and the first amendment." good morning. bloomberg surveillance from new york and london, francine lacqua and tom keene. the nation was transfixed by the book. 24 hours ago. with legal action of the white house in the