♪ >> good morning from blue murders. i am sophie -- from bloomberg's asia headquarters. daybreaklcome to australia. here are your top stories. global markets continue their march into the second half in a tug-of-war between better eco-data and worries about the coronavirus. the dollar ends its longest winning streak since january.

cases continue to surge at home and abroad. the world health organization reporting a new record high for u.s. one-day infections. this person has been in the job for -- three different governments. taking a look at how the markets are faring, u.s. futures trading mixed. lower onr we saw friday at the end of a risk on week for u.s. equities that saw big gains across the board with the nasdaq closing at a record high. it was the first down week in four for the u.s. dollar going into the july 4 weekend. longesta stop to the winning streak since january for the greenback. funding rates continue to decline with dollar libor falling to a low on friday.

and the best week for the bloomberg gauge since 2016 with copper notching a second weekly $1800.d gold closer to spreadseeing contango widening. wti is off, and brent holding above 32.84. haidi: take a look at how things are shaping up early in the monday morning session. seeing new zealand up .2%. chicago nikkei futures pointing to a mixed to slightly lower open when it comes to the opening of major markets in asia, off .3%. sydney futures also softer. the aussie dollar, although we saw weakness in the early part of the session, currently 59.41.

the weakness earlier, with the heightened virus response from the major state of victoria as cases surge, over the weekend we saw stricter lockdowns with public housing towers within victoria in melbourne coming under restrictive levels of lockdown to get on top of the virus concerns. that, globalith coronavirus cases topping 11.3 million as the world health organization reports a single new record in new infections. cases in japan and the philippines continue to rise. some are calling for more stringent restrictions to curb the operate in the u.s. let's get the latest from ros krasny. we don't have a break in the upward trend of coronavirus cases. some places and

localities, you can see possible light at the end of the tunnel or muddy statistics because of the holiday weekend. but many states -- we talked about texas, arizona, parts of florida are having trouble. hospitalizations have been on the rise, a measure we have been talking. this is the highest since late may but nowhere near the peaks with new york and new jersey in the midst of the pandemic. the trend is a lot of cases. trump had hisnt big independence day events. he was hammering home this message, prioritizing law and order. ros: yes. if anybody looked for president trump to cross the aisle or put out some paradigm, we are all in

this together for the independence day holiday as others have, this would have been mistaken. these were partisan speeches at mount rushmore and at the white house. president trump talked about stamping out the radical left and even used the fascism word once or twice. talked about angry mobs. certainly there has been violence involved in the protests we have seen. for the most part peaceful. particularrump has a agenda he is trying to push. he is under water in many opinion polls and believes this kind of law and order message, this harsh rhetoric fires up his grace and his chances of being reelected. so we don't know how active the polls are.

joe biden was ahead of president trump in many states. something to be concerned about for trump. one thing we might watch out for, circling back to coronavirus is trump's fda chief is worried jacksonville, florida will really be prepared to hold a republican national convention in august. it is only a few weeks away now, because coronavirus cases are surging there. that would be embarrassing to the president after switching the convention from north carolina to florida. there are a lot of things to be worried about. he will have another rally this week in new hampshire. he will speak outdoors and people who go to the rally are being encouraged or will be provided with masks, and also

have hand sanitizer. maybe trump is bending his message to the reality of the virus is still a factor. a shifting tone for the message on masks. we will have more on the virus later on this hour with the university of new south wales head of research marina mcintyre. let's get you a check on first word headlines. goldman sachs is lowering its forecast for the u.s. economy this quarter but expects a rebound in september. consumer spending may have stalled, but it is possible to resume activity post virus. they say the u.s. will grow 23% in the third quarter. this is the economy slumping 4.6% this year. features telco huawei

-- faces a for the reverse. new report says american sanctions mean probably they would have to use on trusted technology making -- use untrusted technology making security impossible. a timetable is yet to be confirmed. the tokyo governor has been reelected for a second term in a landslide victory as the city deals with a surge in coronavirus cases and retains hopes of posting the olympics. she beat 21 challengers to win another four year term saying she took 60% of the vote. she shunned public rallies and opting to address voters online. australia's finance minister says he will step down even as the company suffers its first recession in 29 years. he has been in the job since 2013, under three different prime minister's.

he still has -- prime ministers. he still has to update the budget for july and september before he leaves politics. sophie: more on his decision to step down at the end of the year, how much will the move shake up the government midway through its first term? and a second term outlook, the lengthy v-shaped recovery ahead. this is bloomberg. ♪ ♪

sophie: u.s. stocks wrapped up -- r best decade in now it is a cloudy half of the next year. -- next half of the year. thank you for joining us. does not look like you have

policy makers looking to step off the pedal anytime soon. how are you positioning to gain an edge in the second half? >> thank you for having us. there is level of clouds in the horizon because there are risks. we get the u.s. election really coming in the forefront and given there is a fair bit of uncertainty about the outcome, not to mention a third candidate as of last night, there will be that uncertainty. we have a new security law in hong kong, maybe financial aspects of that and last, the covid crisis but is far from over. even though the monetary fiscal policy, and there will be more coming with that, dealing with the cloudy outlook will not be the same everywhere. china is being looked at as an example of balancing public health and economic recovery. i want to demonstrate resilience

we have seen with chinese stocks. chinese stocks rallying to a five-year high and is looking overdone for all of the main stock indexes including the shanghai composite, all over 80 for the first time since march 2019. are you still finding value? >> it looks like a resilient rally. the chinese economy has handled the covid crisis with the right balance between economic policy and health policy and although lockdowns have been severe and -- chinahina suing showing resilience and having positive readings in production and profit data, so although that short -- the chart looks short-term, on the medium term china as well as other asian-pacific markets have value in this and your region.

why asia-pacific looks pretty attractive. where do you see valuations being manageable within asia? >> in hong kong the value is cheap and all of the issues we have had and it stands out on the cheap level. the manageable part is more than japan, china, new zealand if you can't calculate therein, the strength of the resiliency shows although there may be short-term indicators, seems like stretch valuation there is a bit of scope for further improvement, also because these countries are forming a travel bubble. they are opening their borders to one another and it leads to commerce and activities. in the region itself, there is

upswing whereas globally there is not. in the region there is that opportunity for further appreciation of the equity. you talk about the opportunities for value in hong kong. the economy is walking a tightrope, the political situation seemingly to unravel. would you investors to make a bet on the future of hong kong by investing? it is interesting how this is playing out in terms of the stock market. the data that is showing there is increased inflow coming from mainland china. there is different reasons but the key is there is some level of support. i think it is relevant in the context of the geopolitical tension that is building around the security law globally.

if you think of hong kong you think it will stay in the cheap valuations zone for a while but it becomes appealing if the support from mainland china is more like consistent and therefore you could draw on future capital. i would watch that carefully even though there are risks given the nature of the political tension and geopolitical tension. sophie: turning to the credit space, we saw the dollar market -- issuance picked up more so than in years past. what years -- what risks do you see materializing? >> that is a good point because credit has been an instrumental factor for the rally we have experienced for march into june. because central banks stepped in, not just that but other central banks to provide what we

call the credit backstop, what that led to was not only to the flows in equities and developed markets but the emerging markets. sovereigns linked to credits. this is why the issuance has picked up so much in dollar the dollar with some strength and weakness has been relatively stable, that has been the big demand. the concern is in the second half is if we get liquidity issues, the dollar bond market is prone to liquidity risk and it may come up with that --, up a bit. -- liquidity risk and it may cup ome up a bit. this is why i think people are more careful about allocated further to emerging-market credit dollar bonds. haidi: always great to have you.

ben emons, managing director at medley global advisors. -- this as is pretty coronavirus cases continue to rise. he says we are in the first phase and told us what he thinks central banks should be doing. lot to face this crisis. it is not over. as we have heard, cases are picking up, and we will have to forinue facing uncertainty corporate and households to face uncertainty. moreore they do it, the they have to invent new instruments and the higher the risk they would come closer to the line between fiscal policy and -- we have to be mindful of that. >> do you actually see that readjusting at any point, or will they be likely to cross

that line you say they are getting closer to? >> it has readjusted. if you take europe as an example, we see a strong fiscal action from all european governments and also for the first time the plan is to use resources, coordinated resources to face the crisis. policy is waking up to the challenge and that is really good news. >> i want to sort of lean on your expertise for being former executive board member at the ecb. a guest earlier said we won't see positive interest rates in europe, a fundamentally steeper curve or ecb balance sheet reduction this side of 2025. do you find that problematic?

>> that is what markets are telling us. we have got to listen. the way we will step out of this crisis, which is hard to tell. it is about raising productivity in the eurozone, maybe differently from the crisis. so that the return can go back and ultimately the ecb can retreat. the key is about existing productivity. the french government is looking at ways to extend crisis measures with a long-term furlough turning into partial equity. we were talking about the partial -- the crisis fighting measures, what are the risks of government prolonging emergency support in france and elsewhere? >> it is a transition.

in europe, the most acute phase of the crisis is behind us and we don't see signs of the crisis coming back, the virus coming back to the extent that would require downs. -- require new lock downs. the government as to continue the transition to a thing that can be more sustainable. and that informs moving from --uidity issues to or the severe issues, so instruments will have to evolve to correct that. sophie: the former ecb remember. had been hathaway has silent on the acquisition of front until now. a multibillion-dollar steel next. -- deal next. ♪

haidi: warren buffett's berkshire hathaway has made its first acquisition since the pandemic again. -- began. joining us online is our reporter. what you know about this deal that adds to already what is a sprawling portfolio of assets within energy for berkshire? underscoreshe deal how big berkshire is going to be in the energy sector after this. these operations are going to spread their hold in the natural gas transmission side of things. it underscores how buffett is willing to pounce. he took a cautious approach in may, warning people we have not

seen the worst case possibilities, and people took it to mean maybe he would be holding back a little bit on the dealmaking front. i think this deal and the size billion total, underscores he is willing to put some of the money to work. sophie: buffett pouncing after facing criticism for his cautious approach. what does this deal say now? reporter: i think it really says he has been facing a lot of criticism for not doing a lot during the bull market and not doing a lot even as market started turning with this pandemic. strikes he is going to when he sees the deal he wants, which is consistent with his philosophy of waiting for the assets he thinks fits well with berkshire and is at a good price and he is willing to strike for

reasonably sized deals. it will hopefully calm investors who wonder if he has lost his touch, or is there something about the deals he is seeing he is not liking? hathawayhe berkshire reporter with the latest. let's get a flash of the headlines. haschinese starbucks rival tossed out there chairman days after he survived an attempt to be stripped of control. he said three other directors will follow the man out after an extraordinary meeting in beijing. facebook will meet its most prominent critics this week to address concerns about hate to speech and misinformation. i have long tonight they don't doing that -- they have long tonight they don't do enough -- denied they don't do enough against hate speech. rolls-royce trying to ride out the slump in the aviation

industry. there is a report that said it is considering several possibilities including a shares sale to raise $2.5 billion. china taking care of a civic security, denying they held talks about a possible merger. this comes after claims china's biggest investment banks were planning to place a powerhouse brokerage to rival wall street. there is no discussions taken place. let's look at the markets. in wellington, seeing a little 50.ged for the nzx nikkei futures are off .3%, looking at losses for sydney stocks. we have the aussie dollar holding above 69 as we assess the latest virus infection -- we

assess the latest virus infection lockdowns. australian finance minister but he is formant will be stepping down at the end of the year. this is bloomberg. ♪ the best tv experience just got better

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for kids at home- all on xfinity x1. we're committed to helping all families stay connected. learn more at xfinity.com/education. you are watching daybreak australia. president trump used his july 4 address to champion his handling of the coronavirus pandemic even as infections continue to rise. 34,000 on sunday, now 2.8 million cases. fatalities approaching 130,000. the world health organization reported a record one day high new infections on saturday. north korea is ruling out new talks with the u.s., saying washington is using this as a political tool.

talks collapsed last month as pyongyang accused its rivals of abandoning promises made in the last summit. pyongyang says it has a detailed strategy for dealing with threats. the u.s. presidential race may the in for a major shakeup with kanye west saying he is coming on board. social media exploded after he tweeted his intention to challenge president trump and joe biden. he has almost 30 million followers and seems to have won the backing of elon musk. haidi: the longest-serving finance minister in australia will leave politics at the end of the year. paul joins us with more. unique steady hands to steer a

ship -- you need steady hands to steer a ship, so why is he leaving? has beenere speculation he would be leaving. he said if i continued after 2020, i would feel honorbound to contest the next election. he will work on the october budget, get the year-end fiscal update out of the way and then he is gone. inhas been a huge figure australian politics. he managed to keep his role through three prime ministers. there are no bets on his replacement but there is discussion among the trade minister simon birmingham. it has been an interesting 48 hours despite all of this crisis. the morrison government almost picked up another seat over the weekend with one election. that is a marginal seat held by the labor opposition party.

it was really close and that is surprising considering that was an area badly hit by the bushfires over the summer and the prime minister's visit did not go down well at that time. there is no change in the composition of parliament. sophie: no change when the rba meets. paul: still -- steady as she goes, staying at .25%. the rba has not bought any government bonds since may. we really are looking for commentary around the recovery and how the picture looks. we have heard the rba calling for the government to keep stimulus in place beyond september. if it will be removed, to taper it off. we have got economists divided about what recovery we will see in australia.

u-shaped, w shaped, the usual alphabet soup discussion. there are worries many businesses might not survive a second wave, not to mention the huge hit to consumer confidence as well. with regard to whether we might see more restrictions, what is the risk of a second wave as we see cases spiking? paul: things are looking concerning out of melbourne, almost 200 cases over the weekend, now 500 active cases. nine high-rise public housing towers under police guard with 3000 residents in them. the chief medical officer described them as vertical for ships when it comes to the -- vertical cruise ships when it comes to the transmission. the premier admits it will not

be an easy time for those presidents, -- those residents. but the risk of a second outbreak is too great to bear. haidi: will get more on the virus return in australia from raina mcintyre and see if these lockdowns will be enough. if you are away from the screen, you can find in-depth analysis on bloomberg radio, broadcasting live from our studio in hong kong. you can listen by the cap great --a app radio plus. this is bloomberg. ♪

♪ haidi: while u.s. futures dropped in the friday session and markets remain closed, equities and bonds for the independence day, looking at asia, seeing modest upside with trading in new zealand. kiwi stocks paring those session government%, the will be extending the interest rate loan program as part of the broader economic stimulus package.

we are seeing downside when it comes to nikkei futures trading a quarter of 1% lower and sydney going to start on the back foot as well. seeing the aussie dollar regaining strength. 6933 -- 69.43. let's get you a quick check of the latest business flash headlines. dominion energy is selling most of its pipeline in storage to berkshire hathaway per $4 for $4 -- halfwathaway billion. its partner is killing the controversial frozen gas pipeline citing cost uncertainty. a semi conductor is looking to raise $75 billion in a shanghai sale. this was aimed at doing to help

the company compete internationally. the sears have soared amidst 180% in -- almost 180% in hong kong this year. it will focus on home growth. largestchina's ride-hailing company is making an aggressive push towards self driving cars. they are still far from full autonomy. we will talk about how long it will take to replace drivers completely. reaction has been way beyond expectation. we have overloaded wishlist of andle wanting to come over test the vehicle and have the experience. day tore working day to

handle requests and having whate come in and get them they wished. now a safety driver is still required. at what point would they not be needed? >> the safety driver today is like the guardian angels of the autonomous driving system. they serve important goals. when we are starting to introduce passengers to our testing process, it is important to uphold the safety standards with these guardian angels. goal is taking over the steering wheel when necessary and one is looking at the system monitor to observe what the driver sees and does not. >> didi faces tough competition in this market. didi's technology apart from the rest of the pack?

>> it is a good question. we have a lot of talent and great companies working to solve this problem around the world. and they have made a lot of progress and achievements so far. what essentially what it boils down to is two things. one is the ai capability which is how many cases we can solve and that boils down to how much data we can gather and how efficient and -- to improve them. and how can you build up a network of vehicles as well as passengers? for didi we have advantages on both. we have a large suite of ride-hailing vehicles that are test vehicles, all of them gathering road data and we are leveraging that to improve.

with that said we have a relatively available network of users on the didi network. it running, we can insert the vehicle into our won'tk so the passenger feel a thing. there will be a stimulus transmission into experience with autonomous services. >> when you look at the industry, what is the biggest bottleneck to deployment? is it regulation or collecting deked the -- collecting data? >> the reason this is a difficult problem is that it is for oneoblem only party. i think it has to be a collaborative average across the technology developer, the service provider, the hardware provider and regulatory body. we are trying to move this in the same direction together and

hope we will be able to solve them around the same time. so it is in parallel rather than in cereal -- in serial. had a hub in silicon valley. how have u.s.-china tensions affected you? >> i don't think this is competition. efficiencyg to solve and safety for passengers and i don't think anybody should compete on safety. it is a humanity problem we are trying to improve. over theserving covid-19 in recent times u.s. , they have some plans in changing the work structure and leaving some of the talent outside. i think for us, we believe this

is a problem, that is difficult. we need the global talent base to come together to solve this. we are maintaining our growth in the u.s. office as well as our china office together more talent to help solve this problem quicker. more talent to help solve this problem quicker. haidi: the coronavirus pandemic is ravaging communities across the world but the younger generation is bearing the brunt. intergenerational inequality and it has been spoken about since the global financial crisis. in australia there are memes about spending too much on avocados to afford housing. >> i think the important thing to note is the root of why things are so bad for that young generation comes from the

previous financial crisis. we are not talking about the millennials, the oldest of which are starting to get into their mid-30's. we are talking about gen x, z.ry, hr dealing with the impacts of the global financial crisis, they in casual jobs, don't have permanent contracts and they are in roles like retail and hospitality which has been worst hit. across the developed world you are seeing youth unemployment rates spike faster than those of the older age groups. sophie: unemployment for the younger generation and under unemployment for the other, looking dire going into the endemic. what do we see moving forward to this isa boost given

the first time they will be going through a recession? emily: the answer is no one has got great answers for that. all of the stimulus packages around the world were has to link put in place -- world were hasitily put in place. wagestralia with the main situation, if you are on a casual contract which does not guarantee hours, you had to be employed for a year. a quarter of them, the youngest who don't qualify for it. employedbout self people slipping through the gaps, older people. moving to the next stage of the pandemic, the pressure is on policy makers to work out what support they can give to these groups. generationgest suffer worse than this, it will

have scarring effects. there are huge amounts of academic work telling us if you graduate or start working in a recession, you never catch up with your peers. it is a long-term problem for the economy. as to what politicians are doing, [indiscernible] haidi: i was going to ask that, policy response in terms of what you asked in your story and what is the upshot for the makeup of the labor market if this continues? emily: i think you are going to see higher levels of actual unemployment and underemployment. this is people who can't find the type of work they are qualified for, enough hours, and people who are discouraged that they drop out of the labor market entirely. that is appalling both for the individuals themselves and in a more hard nose way, the ability of the economy to reboot itself

post-pandemic and start again. policy, nobody has given us great emphasis -- great answers. a lot of people say there needs to be more targeted help but many of the answers are things like more training, which training requires jobs to go for. this is one of these questions i think we will be talking about a lot. right now there are not any great answers. one individuals you cited in the stories, he said he is not future proof and does not have a lot of savings to fall back on. what are the ramifications for the wealth gap? emily: the ramifications, we are likely to see a broader split between the haves and have-notss. maybe your family already owns

property. you can move back in with them. while it is terrible to put your life on hold, it is something you can do. typically people who are renting don't have their bedrooms. if your family don't own bedrooms, you can't move back into them. get under -- overcrowded housing or running up huge amounts of debt. what you are likely to see is a splintering within generations of the wealth gap between those who have family support and those who don't. in a nation like australia which has prided itself on the ability for anyone who works hard to get inhance, that is worrying terms of deep impediments that will be in place for the next generation. sophie: thank you to emily cadman in sydney. we want to get you some information from the singaporean

developer capitaland group. we are seeing the company operating after-tax and minority interest dropped 25%, 35% for the first half. material, seeing the material adverse impact. capitaland group will release 2020 results in august. that is a taste of what is to come. you can get more on today's stories in today's edition of daybreak. ivers can go to dayb and -- subscribers can go to dayb on their terminals. this is bloomberg. ♪ ♪

water utilities have been hit hard by the covid-19 pandemic with waste services reduced globally. we spoke to the ceo of a french waste giant and when he sees a return to normal. >> the issue we are waiting [indiscernible] especially its impact on the issues as important as the water cycle, fighting against pollution, before covid-19 and after. is those issues have to be addressed as a key priority in the future

investment that all of the countries are doing, to put, to realize the economy. having exchanges with the e.u. commissioner, the government, we have a good reception around redirecting investment. there afterl be covid. >> you have mentioned the possibility previously of tracing the coronavirus in waste waters. is any government planning to give you a key role in this sort of surveillance? >> this is the result of research we have been carrying out in the past month. first of all i want to make clear there is no issue for drinking water on the treatment processes. all of the services are able to kill the virus area there is no risk around drinking water.

wastewater treatments are not up to the latest standards or we areicated enough -- able to correlate the presence and we are putting in place, in france and several network -- at watch network to anticipate the famous second wave in a couple of european countries. this is the case in france. this will be the case in spain. our dutch colleagues are doing the same. >> what about the wake of covid-19 crisis? how long -- how long will it take to recover what was lost? we had this market information -- is pretty basic.

we expect a loss of revenue which is directly correlated to the loss of volume around 6%. asia [indiscernible] it is the case in europe since mid-june and another hot spot in the u.s. and latin america. we see a very important rebound as soon as economy are starting again. but there are still sectors that are not up to speed, air transportation, manufacturing and tourism. i am afraid this will take some time to get back to historical levels as there is still a lot of restriction in terms of trouble from one country and one continent to the other. inwe are still, we are more

institution where we think volumes should get back to historical levels, more in the second half of 2021. suez ceo.t was the checking on markets on monday morning we are seeing trading in new zealand underway, off session highs. we have pared gains to be trading back at the moment to -- despite the government saying it would be extending interest-free loans to spur the economic recovery. the kiwi dollar 65.38, gains alongside the aussie dollar resuming after five days of gains. weakness this morning. seeing this despite the escalation of cases anti-lockdown in melbourne as well, sydney futures pointed lower. coming up, we will be getting japan.

we are joined by disenfranchised professionals from hong kong. carlos casanova -- the eco-look ahead. this is bloomberg. ♪

haidi: good morning. we are counting you down to ages major market open. sophie: i'm sophie kamaruddin in hong kong. our top stories this hour. global markets continue their march into the second half in took of war between better eco-data and worries about the coronavirus. the dollar and the longest winning streak since january. president trump