>> good evening from bloomberg. we are counting down to asia's major market open. i'm shery ahn in new york. >> i'm haidi stroud-watts in sydney. welcome to daybreak australia. clouds gathering over the global economy. the imf says the corona virus impact will cause more damage. covid-19 infections continuing to rise. the surge is reported across several u.s. states. the governor of texas, warning of a massive outbreak.

hitting stocks. wall street falls as the virus weakens the recovery. s&p slipping, led by energy, financials, and industrials. let's get started with a check of the markets. >> we are seeing u.s. futures flat, after we had a solid risk off session in new york. we had a resurgence in virus cases and news the white house is weighing tariffs on european exports. we have the imf downgrade of the 2020 global economic forecast, so the s&p 500 saw its largest fall in almost two weeks. all 11 sectors on the s&p 500 sank. the nasdaq composite falling for the first time in nine sessions, down more than 2%, halting the longest winning streak of the year. this, as we continue to get more political news on how the coronavirus pandemic could affect the political schedule going forward towards the november elections.

democrats, saying state delegations shouldn't attend a convention. saying they should work remotely. pressure coming not only from the fragile economic recovery that also u.s. crude inventories rising for a third week. oil seeing the biggest drop in almost two weeks. gaining a little bit of ground at the moment, above the $38 per barrel. imf saying the global economy will contract about 50% more than what it projected even two months ago. it could be on the verge of a depression if a second wave of coronavirus takes hold. our global economics and policy editor is here with the latest. grim inf economist was her outlook. >> the imf started worrying after they made their april forecast, which saw a decline in global growth, that might have

to downgraded further. the chief economist talked about the lockdowns hitting production and supply, being disruptive, and in the end, cutting demand. here is how she explained the reduction they made, a drop of 4.9% in 2020.%, let's listen to her own words. >> what we are seeing is that in the first half of this year, when the lockdowns were most severe, the impact on economies was worse than we anticipated in april. that was one factor. the second factor is because there is still no medical solution to this crisis, we are expecting more persistent social distancing into the second half of this year. an combination will have effect on growth potential for economies. these are some of the main factors behind the downgrade. economists and officials and policymakers around the world, she said there

is a high degree of uncertainty around the forecast. >> she sees the risk of another depression. >> she does. she see up -- he sees upside risk. -- she sees upside risk. there may be treatments and vaccines. we may see more treatments. this could help global economies, individual countries have a faster recovery, but the downside risk with so many people fearing in the light of the latest virus numbers in the u.s. and around the world, more waves of infection. this puts a damper on demand because in lockdowns, you can't go out and spend. financial conditions tightening, you get stressed. she compares the current economic downturn with a 10% loss of global output in the 1930's. that was around the time of the great depression. >> the case we simulated of a second wave would generate basically zero growth in 2021 as

compared to five point 4% growth in 2021, which we are projecting. shaped is the classic l non-recovery. that would be a really dire outcome. we would get closer to great depression levels. >> l shaped recovery, nobody wants to talk about it. the l is not the same letter as a v. talking about the roughly $11 trillion of emergency spending that has been committed, put in place by countries around the world. it is good, except it will push the global debt ratio above 100% for the first time ever. high global debt means more bonds being issued, higher yields potentially. that is the down the road concern. right now it is how bad the downturn will get. growth outlook looking like when it comes to individual countries? are there

bright spots? developedrall economies are probably going to suffer more than emerging markets. this chart, you can see what the world will do. down 4.9%, almost twice as big as the previously forecast 3% drop. u.s. down 8%. the euro area down 10%. japan is seeing almost six points -- almost 6%. china is the bright spot, a 1% gdp gain this year instead of 1.2%. emerging markets more broadly, that number for the group is expected to see a decline of 3% this year. previously it has been -- had been smaller at -1%. china, 1% growth is almost as bad as contraction for other countries. however you look at it, unless some positive surprises coming the second half of the year, the world is heading for some pretty negative numbers.

6.1% growth last year for china, our global economics and policy editor, kathleen. we will hear more about the global outlook later this year. talking strategy and markets rebounding. this is bloomberg. ♪

shery: here are the first word headlines. fears are growing of a new wave of coronavirus infections in the united states. the governor of texas, warning of a massive outbreak underway. cases have been spiking across the country, forcing local leaders to reassess plans to reopen economies. this is despite pressure from president trump. a model from the university of washington sees u.s. fatalities surpassing 180,000.

in tokyo,ases workplaces seen as the focus. authorities reported 55 new infections, the most in a single day since may 5, when the capital was under a state of emergency. the pandemic romped ted the imf to warn, it now sees the japanese economy shrinking more this year than during the financial crisis a decade ago. the fund sees a contraction of almost 6%. south korean activists stepped up propaganda against the north, sending antiregime leaflets across the border. this comes after warnings of potential military action, but after kim jong-un ordered forces to pull back from confrontation. activists sent balloons carrying 500,000 leaflets, u.s. dollar bills, and books denouncing the north. the high mountain border clash between china and india is heating up again, with beijing making new allegations that its

thatbor provoked the clash left at least 20 soldiers dead. the foreign ministry, trying to claim the incident happened on the line of control and indian forces entered chinese territory illegally. the sides have agreed to de-escalate the tension. haidi: u.s. stocks slumped as investors grew anxious about the resurgence of virus cases in multiple states hampering the broader recovery. the s&p rally has stalled. it looks to be fighting an uphill battle from here. we are stuck in wait and see mode as we see the 200 day moving average and -- staying firmly in the midrange. bound tradingow action holding for a while, that could see some difficulty breaking through to the old highs.

let's bring in a portfolio manager, who joins us now. great to have you. we are finally seeing investors, i guess, stumbling as we get worry continuing to build? >> i couldn't agree more. at some point, although we are positioned to respond, we expect to see a trading range as we earnings and as increased cases come up and we have the elections coming up later in the year, all of which will be in focus for investors as we navigate the next months. so farwhat we have seen that has driven the dislocation between the economy and the markets has been the guarantee of plentiful support from the fed and other central banks. are we starting to see the diminished return in terms of sentiment in the market? >> perhaps. in addition to the fed, clearly

we have had great economic data, the less bad has been good, the retail numbers last week were terrific coming off a double-digit decline in the prior months. we had a double-digit gain last week reported for the month of may, which indicates the consumer is coming back. that would be another plus in addition to the fed backstop. again, as you mentioned, there is a lot to navigate through. this is a heavy economic week as we have economic numbers coming up over the next couple days. we have sentiment numbers coming out friday, and those will be important to see if that follows through based off, based on the retail sales last week. shery: those sectors that look like safe havens during the pandemic, like tack, -- like tech, are looking more overextended. the nasdaq 100 has soared above the average and is similar to a

level at the pre-bear market. where do you go from here? >> we would argue to continue with those sectors. it is a great description, extended. the ability of those companies to with strand -- withstand a bumpy recovery, we believe, are worth paying up for. --continue to be specifically software services. we have a bit of an overweight to health care specifically and medical devices. shery: as we head into another earnings season, what should investors be asking as we hear from these companies' performances? >> we have so many companies that have suspended guidance. i believe companies will, if they start even guidance again -- giving guidance again in the

guidance isn't what we expect, and you see the market at risk, i think recent business trends companies have experienced, as locales open up in the u.s. and abroad, that will be important to sustain the market at these current valuation levels. haidi: how do you hedge the great uncertainty that the rest of the year continues to hold? we are seeing recovery when it comes to the opening up stocks and even they stumbled overnight. where are you finding opportunity and safety in the market? us, we are think for not trying to predict what the outcome will be as we navigate through the earnings season or economic data. we rely on our process. 2950 level, momentum pulled us back into the market. we had risk off in february, early march. we started putting money back to work in late march, early april.

we won't try to rely on prediction. we will rely on process. overweight equities and we are leaning into the u.s., we added international and we are aing fixed income against downturn in volatility. shery: rebecca, always great having you. you can get more stories you need to know to get your day going in today's edition of "daybreak." it is available on the bloomberg at -- anywhere app. you can customize your settings. coming up, coronavirus cases are spiking in the u.s., with the governor of texas reporting a massive outbreak. we will have the details, next. this is bloomberg. ♪

shery: tensions between the u.s. and china continue to rise. we are getting the latest headlines crossing the bloomberg with the director, -- the fbi director saying china is the most comfort hands of threat to the u.s. the fbi -- and the fbi has 2000 active probes that trace back to china. this coming at a time when president trump is also saying he got billions out of china, and gave much of it to farmers. let's bring in emily in washington with more on the rising geopolitical tensions between the u.s. and china. there seems to be a consensus in washington that china is a threat. something we have been hearing more and more from u.s. intelligence agencies, something we are seeing reflected more in washington politics, concern about china's role in a number of areas.

everywhere from the south china sea, trading, tariffs, the coronavirus. how thed we don't know virus emanated from wuhan, but it is something the fbi is looking into, something trump has called to look into and many republican senators were -- support him on. we see virus cases continue to build across the u.s.. what is the latest? there is concern that the effort to flatten the curve when it comes to, in houston, it is not working. >> the mayor of houston suggested cracking down on those not following the rules, naming and shaming them. this is happening as texas is one of the states where new infections or hitting record levels. we are seeing that in florida, california, high levels in arizona. some of these places have opened up and are now seeing an influx

of cases. comeshard to know if that from the opening up, from people who are not following protocol, wearing masks, but other states have started to respond. new york, new jersey and connecticut will require visitors from hotspots to quarantine for 14 days. you are seeing states respond to other states where you are seeing an increase in the number of cases. breaking on the terminal, the democrats are now saying the state delegations shouldn't attend the convention, they should do the convention and work remotely. we have heard the possibility that the results of the november election could be delayed. where are we when it comes to the schedule of the political agenda this year in the united states as we continue to see this resurgence of virus cases? thingsyone who thought -- thought we were going to get a clear act -- answer on

election nights need to pay attention to major races that haven't been called and aren't expected to be called for weeks because it is going to take time to receive and tally the number of absentee ballots. covering elections has been interesting. normally, there is tension and excitement on election night. now, that is being dragged through the week. don't expect this november to look like other novembers in that regard. this is something that may take time to make sure everyone can vote and everyone's vote is counted. emily with the latest. citigroup says it has seen worrying signs in asia's consumer sector as the virus continues to weigh on sentiments. president warned consumers in asia are far from firing on all cylinders. she discussed how u.s. consumers

are faring amid the crisis. >> we have been surprised, while we had about 2 million or so customers who signed up for relief programs in the state, a large number of them carried on making payments. we have seen the re-enrollment rate into these programs down in the single digits as a percentage of the previous enrollees. the first phase has worked well, but the future at the moment is anyone's guess. you have to think scenarios. >> we saw a significant government stimulus in the first part of this crisis. checks even to americans. when the stimulus wears off, the first round, do you think we will see a rise in defaults? >> it is a possibility. we have seen a number of people come out of relief programs, then go back to paying credit cards in full.

the question will be, how much of this is because it is from the stimulus programs, and how much of it is people going back to work again? i know all of them want to. lookingoment, it is optimistic, but really, the health situation is going to drive what really happens and whether it is a w or how strong the v ends up being. asia has been concerning. it has been sluggish in the return of the economy in many of the sectors, the consumer is being more cautious about spending, and even the health impact has not been as great -- even though the health impact has not been that great, the consumer is far from firing on all cylinders in asia. that is a point of concern for us. >> the consumer is becoming such a big part of what economic

growth rates could look like moving forward. can you hone in a little on what your biggest concerns are? where are the areas where we may see the most pain points moving forward? >> from the consumer perspective, unfortunately, who got hit hardest. the youth, minorities, low income, many of the individuals who were able to work remotely and from home tended to be in the higher-paying roles. was to thete hit more vulnerable parts of the population anyway, and the health crisis hit the elderly, whereas the economic impact hammered the youth and minorities. that is a point of real concern, to think about how we help them recover. the other question that comes up that we will have to, we will find out before too long, which is the different corporate sector -- which of the different

corporate sectors will need to recover -- restructure because we don't need the capacity we have? what does that mean in terms of a round of corporate layoffs in the sectors being hit the hardest by this, or that may be hit by a longer-term macro slowdown? there are additional hope there are only two of them and the second is positive, but it could be several. fraser speaking to bloomberg. the latest headlines, tencent appears to be a rare company emerging from the coronavirus upheaval in better shape than it started. lockdowns triggered the surgeon game, which is being boosted by the release of a new title. the game debuted this month as the most downloaded title in china. tencent rose again, extending their all-time highs and listing

the stock further -- lifting the stock further from its march low. a whistleblower in germany warned about accounting irregularities and market manipulations. the finance ministry received papers from an anonymous source in late january 2019. the regulator apologized for its response, which has seen wirecard lose on most all its value amid concern that $2 billion cannot be found. facebooks's $5.7 billion investment in geo-platforms that triggered widespread interest in the company and gives the social network just under 10% of the company. has many users. joined by our guest on china influencing everything from ipos to the real estate sector in hong kong.

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transfer your service online in a few easy steps. now that's simple, easy, awesome. transfer your service in minutes, making moving with xfinity a breeze. visit xfinity.com/moving today. haidi: a solid risk obsession in the u.s. shery: let's see how things are setting up in asia. we do have a few holidays in hong kong. >> hong kong, taiwan and china markets are off-line for dragon boat racing. joining thet potential selloff likely in asia. sectors largely led the u.s. lower. pulling up the board to check futures, sydney stock futures pointing at potential losses of one percent or more with the benchmark looking overextended after a four-day gain.

the indicator flashing red for the asx 200. stay defensive on australian stocks, and there is warning of a risk for corrections. second wave concerns and a potential withdrawal of the stimulus punch bowl, top of mind along with price valuations. speaking of jumping into the terminal, worries could make it difficult to shrug off negative surprises with the easy money stage of the rally seemingly in the rearview mirror. when it comes to the earnings outlook, that mame -- may be muddied further with a grim prognostication for global growth by the imf, warning financial markets are disconnected from economic prospects. investors may be cautious with asian stock valuations at 10 year highs. you can see on the chart, credit suisse expecting asian stocks will outperform on a softer dollar, improving economic data and policy support and banks

saying bright spots in chinese consumer demand are among the indicators that bode well. at citigroup, the president said she is worried about consumer behavior in asia, saying they are not fine -- firing on all cylinders. msci picked hong kong over singapore in the battle for dominance between the regional financial hubs. the provider assigned its licensing agreement there, despite mounting geopolitical tensions and ongoing social unrest. the ceo told us why he thinks hong kong will come out stronger bill.the looming security >> what we saw in hong kong was a combination of very strong factors that lead us to this decision. base, large customer including international investors, regional ones, and chinese investors. secondly, a very large and deep pool of liquidity.

anrdly, and ability to -- ability to build an ecosystem of exposures around the world, but also a greater china ecosystem, combining in futures contracts, exposures to taiwan, to hong kong, and to the various types of investment in china. china overseas investments versus china asia investment. and also, not only listed futures but also options. lastly, and very importantly, ae ability to develop structure and over-the-counter derivatives by our clients off those listed options. hong kong is the largest, if not one of the largest, structure product markets in the world. interesting.

many within the financial community are concerned about what china's national security law means for the future of hong kong, the protests, we are continuing to see some of them in the city. how concerned are you about the future of hong kong? >> i have been going to hong kong and china and asia for over 40 years. i have heard this story before many times, as to the mis -- demise and relevance of hong kong one way or another. it hasn't happened. every time, hong kong comes back stronger, more resilient. i believe strongly in the future of hong kong as a financial center, international financial center, and in our case, we are looking to see hong kong as a major international risk management center. a lot of it is not only because the rest of the world needs hong

kong to access china, regardless of geopolitical tensions. china will continue to be a large economy, a large financial market, and therefore, international investors will want to be in china, and hong kong is one of the gateways, if not the gateway, to do that. china needs hong kong because they will need a place where there is more advancement , of laws of trading and systems and regulations. both parties will need hong kong one way or another, regardless of the other tensions. fernandez. is henry china's influence over hong kong isn't just political. from real estate to ipos, mainland companies are gaining a greater financial foothold in the city. partnerco-management for a company.

always great having you with us. it seems to have been a pretty busy few months in hong kong. we have seen chinese mainland --panies really have big having mammoth share sales. what is the outlook for the market and for chinese companies making a mark in the city? companies' chinese perspective, they now have choices, where traditionally, they used to have very limited choices. they now have choices, hong kong being one of them. i think china has made this leap to global economic power, and staked its future on building, among other things, credible capital markets. there is an incentive right now for chinese companies to consider many options. china has a lot at stake in having credible markets right

now. they: the options include united states. we continue to see scrutiny on chinese firms, not to mention congress wanting better reporting obligations from these chinese companies. >> that is true. at the same time, these different markets offer different things. they are not all the same. one of the reasons that many of the chinese companies consider the u.s. markets first, number one, they have very, very deep diversified sources of capital. number two, they have the ability to do on ramps, enable to raise money subsequent to an ipo. three, they allow companies to have better brand recognition and to raise something other

than dollars. if you talk about going public in china and hong kong, there are advantages there. they are much closer to the people, they -- people that use their products, they understand the companies, there are -- and even within the u.s. markets, what you have seen lately is, you are seeing more chinese money being invested through the u.s. markets. just because a chinese company goes public in the u.s. doesn't mean it is the u.s. investing money. i would also point out, recently, you have seen given the more markets in china, china has a lot more at stake right now in maintaining road ability within the markets. you are seeing a lot of regulations come down now, making the u.s. markets and china markets more similar. haidi: one of the things we talk about post-pandemic is

deglobalization. does that come into play for some the -- of the companies you deal with as we re-think a global supply chains and how they pertain to china? >> you are seeing a rearrangement of supply chains among companies. we have seen this among companies we represent. you have seen more of it in mid tier companies. as an example, if you want to manufacture 60,000 pairs of pants and a week, there are a limited number of places where you could do that. very limited, especially at the quality many companies who invest huge amounts of money in sustaining quality production in china. for the larger companies, it is not so easy for them to rearrange their supply chains. they have limited places to go to do that. our chinese companies

worried about the backlash? we have seen not just tensions between china and the u.s. pertaining to trade and investments, but we are seeing a similar picture play out when it comes to australia and china. >> most business people are not political. they are going to go from an ipo standpoint, they are going to go where they can raise the most amount of money at the best valuations. given that obviously, we are still in a pandemic across the world, china has some of the best ways of enforcing it. it is likely that some of their businesses are looking better than other places. giving investors around the world the ability to invest in those companies, things -- seems like a good thing. you are seeing the rules changing right now, even to allow foreign investment right now in china.

i think the playing field right now among the exchanges is becoming more level, and the incentives for the regulators are becoming more aligned. they: we have talked about readjustment of supply chains around the world, because of the trade tensions, between the u.s. and china, but then because of the pandemic starting in china. the beijing outbreak seems to be stabilizing and china and they may come out of this earlier than everyone else, will the readjustment of supply chain narrative still hold? >> i don't know. right now, given that we don't have a solution to the pandemic, there is no cure for the virus, there is nothing to do at this point. most businesses are going forward in a cautious way. i believe eventually, you will find a solution to this, but i

think most businesses, this is not the first time this has happened. viruses used to happen every 100 years, 50 years. we have seen numerous ones come forward in a short period of time. most businesses are going to permanently change. china right now, given how strict they are and how they have been able to implement some of the rules in order to curtail virus, seems like it is a good market for people to watch. we appreciate your time. .rew bernstein coming up, imf's chief economist on the outlook of the virus-ravaged global economy. this is bloomberg. ♪

,aidi: breaking news on qantas we are expecting an announcement as to how many jobs they will cut today. the australian, reporting the number will be about 600 jobs cut across the 30,000 strong workforce, 20% of the overall workforce are qantas. we are waiting for the announcement. they are in a trading hold ahead

of planned capital raising, including an institutional placement and a share purchase plan. we are hearing reports from the financial review about a one point three $6 billion placement . those shares, expected -- $3.6 billion placement. those shares, expected to hold. we are waiting for the announcement as to how many job cuts will take place out of the 30,000 employed at qantas. the number will largely affect ground and cabin crews from its sydney head office. we will watch that story. breaking numbers out of new zealand, may imports coming in at 4.1 4 billion kiwi dollars, in line with an estimate. this is largely in line with estimates, and that key export numbers for the month of may, were billion, expectations

for five point 4 billion. the rbnz holding steady when it comes to the size of the kiwi program, saying it can add more stimulus as the economy requires. new zealand is dealing with fresh virus cases after exiting its strict pandemic lockdown. on the pandemic, we have seen the global economic impact, now the imf downgraded its outlook for the world economy, projecting a significantly deeper recession and slower recovery than anticipated. the imf chief economist gita gopinath explained why earlier. gita: we are seeing in the first half of this year, when the lockdowns were more severe, the impact on economies was worse than we anticipated in april, so that was one factor. the second factor is, because there is still no medical solution to this crisis, we are expecting much more persistent social distancing into the second half of this year.

the combination will have an impact for growth potential for economies. these are some of the main factors behind the downgrade. >> there have been conversations that the imf has been more optimistic than other agencies or other central banks, even. what is the likelihood that you will have to keep downgrading your outlook? gita: when we put out on numbers in april, we were ahead of the curve -- our numbers in april, we were ahead of the curve in signaling this would be the worst recession since the great depression and a truly global crisis. those remain the main facts of the crisis and we have had a downgrade, which run us closer to the one of the -- brought us closer to one of the alternative scenarios. unlike in april, i think the risks are more balanced. we have an up to -- an upside risk, you could have a treatment or vaccine, but you could have worse news, a second wave,

financial tightening, geopolitical tensions. i would say the risks are more balanced at this point relative to in april. >> why do you think, and it is not just the imf, but other institutions, have been slow to realize the magnitude of what is happening to the global economy? what is it that you think has caused that kind of creeping appreciation of the damage that has been done? gita: this is a crisis like no other. that means trying to figure out the impact is a true challenge. to determine impact, you have to answer questions like, how is people's behavior going to change? will they want to stay home rather than go out and spend? how will long will they want to do that -- how long will they want to do that? this is hard to predict. lockdowns have been very severe. but it is uneven, and you have some sectors, like retail, the numbers in the u.s. came up, a

look good but on the other hand, if you look at contact-inside -- contact-intensive sectors, those andstill at a deep low barely recovering. i believe this is what we are looking at. this is a global crisis, which means for a country that is heavily dependent on exports, even if domestically you are doing ok, you will have a big hit. out thewe try to work disconnect between what markets are telling us and what the underlying economies tell us, with markets outpacing, do you feel markets are looking towards that recovery or a rebound, or are they looking at something different? ofa: this is a consequence two things. one is the unprecedented policy support by major central banks around the world with huge interventions.

that is one important factor. the second important factor is, given the uncertainty on the path forward, and there are upside risks, i think the markets are focused more on the upside than the rest of us are. that is the other reason why we can expect to see a recovery much faster. we are concerned about excessive risk-taking in the economy, and we think of this as a vulnerability. >> what does your chart look like if we were to see a second lockdown, say in the united states or europe? what about the bottom half? gita: we simulated a second wave and that would generate basically just zero -- zero growth in 2021. shaped the classic l

non-recovery. that would be a really dire outcome and we would get closer to great oppression levels than we already are. -- great depression levels than we already are. shery: that was gita gopinath. breaking news out of qantas, the airline announcing details of the $1.9 billion share purchase plan. the issue price for the new shares under the placement will e. in otherssi details, we are getting confirmation that they will be reducing their pre-crisis workforce, and this represents a 20% cut across the total workforce, about 30,000 for qantas and jet star. a grim day for aviation. 100 aircraft will be grounded for up to 12 months.

domestic flights are at a minimum level at the moment and qantas delayed the presumption of international flights until at least late october. qantas says $500 million australian will be put in place as well as a $1.4 billion underwritten institutional placement. the key headline is those 6000 jobs that will go at qantas. plenty more to come on "daybreak australia." this is bloomberg. ♪

shery: the reserve bank of new zealand expressed concern after a policy meeting about the kiwi dollar's appreciation and the pressure on export earnings. paul allen joins us. there was no change when it came to the cash rate on the rbnz, but the comments on the kiwi dollar's appreciation put pressure on the currency. >> it appears there could be more easing coming down the pipe. came inexport numbers line with expectations. new zealand posting a relatively healthy trade surplus for the month of may, $1.25 billion but the rba expressing concern for the impact the currency may have on exports, signaling policy tools are under active discussion. those remarks appeared to have the desired effect. the kiwi dollar, easing a little, about 64.1 at the

moment. in terms of those extra measures, the cash rate wedged at an historic low, it could ramp up when august rolls around and that would be especially considering there is more issuance coming from the government area there could be more pain coming down the pipe. the first quarter gdp numbers were worse than expected at 1.6 percent contraction, but the second quarter will make that look like a picnic. the second quarter covers the period of harshest lockdown in new zealand. shery: new zealand has done well when it comes to containing the coronavirus. elimination, completely eliminating the virus, is proving difficult. was ai believe there week when new zealand was covid free, but it didn't last. there are now 11 active cases and there have been a few slip-ups, in the case of sisters who drove almost half the length

of the country before discovering they tested positive. the new zealand herald, reporting there are 1300 people who may have left isolation without a test. the health minister, coming under pressure. demand for testing is increasing. we have the army in charge of quarantine facilities. some difficulties beginning to emerge in new zealand. allen inat is paul sydney. more breaking news out of qantas. haidi: that's right. details coming through, in addition to the $1.9 billion capital raising plan comprising a one point $4 billion australian institutional placement and a $500 million share purchase plan, a 13 percent discount. we are hearing the elimination of 6000 jobs from pre-covid levels, 20% of the workforce. 15,000 people continue to be stood down. the ceo says about half the staff stood down and should be back by the end of the year. the ceo will stay on until 2023.

we will have more details in the next hour of "daybreak asia." this is bloomberg. ♪

haidi: a very good morning. i am haidi stroud-watts in sydney. we are counting down to asia's worries about a resurgent coronavirus hit risk sentiment. asian stocks are set to follow wall street lower. sectors fell, led by energy, financials, and industrials. covid-19 infections continue to rise with surges reported across