francine: california, texas, and flow currency record deaths from the virus. see record deaths from the virus. a shocking victory in the election. and china's stock value calls theselling, a sign government wants to slow the surge. good morning, everyone, and welcome to "bloomberg

surveillance." i am francine lacqua here in london. looking some at oil, the oil recovery is at risk because of a resurgence of covid-19. that is having not a direct impact for the moment. we did see a bit of downward pressure. the u.s. 10-year yield pretty much unchanged. euro-dollar a good one to look at, because we saw a bit of data with the european economies. you can see the euro stoxx 600 actually trading sideways, but we did tr see the chinese trying to do their bed. -- bit. thelet's get straight to bloomberg first word news in london with leigh-ann gerrans. hi, leigh-ann. leigh-ann: good morning, francine. the finance minister, paschal donohoe, won the ballot. recoveryhe spanish

minister. action. is having against fran in the long -- france in a long-running feud over tech. ballpark ofn the $500 million to $700 million in goods. the items targeted would include , andh wines, teas handbags. poland, president andrzej duda says he will never allow compensation for jewish property lost in world war ii. the controversial topic is resurfacing days before the presidential runoff election. duda has shifted further to the right as he faces tough competition from the warsaw mayor. and president donald trump has to give up his tax returns, but it is unlikely they will be in the public eye before the november election.

the supreme court has rejected that he has complete immunity while in office. s blocked congressional action, returning the case to lower courts. global news, 24 hours a day, on air and @quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i am leigh-ann gerrans. this is bloomberg. francine? francine: leigh-ann, thank you so much. now, the united states has reached another troubling milestone and the coronavirus pandemic, as a daily cases top 60,000 for the first time. it comes as the world health organization is keeping an open mind on whether airborne transmission plays a major role in the spread. generalabout markets in globalederik ducrozet, strategist at pictet wealth

management. partly of course it is the resurgence of cases. what are they, you know, pricing and right now? they are i think what starting to price in is a transition to a new world, a world after. for instance, we might see a world economy running permanently at the lower capacity rate. it is not so much that we see a thatd wave, it is the idea with this kind of risk and outbreaks everywhere, including we may neverates, see the possible future return to 100% of full capacity, whether it is in the manufacturing sector, the labor market. look at the u.s. data this week. samell, it is still the picture of the labor market permanently hit by this crisis. this is, i think, the main

reason it is priced into the markets and also why we see some consolidation this week. , whatne: so, frederik does that mean for where you see values? the story i hear from a lot of cheap executives is that the pandemic is accelerating trends that were there before. frederik: that is absolutely true. there has been no change in leadership markets. it is dragging the markets higher. the idea, you remember, the last fed meeting, the interest rates remain low for a very long time, that the fed is probably not starting to address high valuation in markets. it is forcing the so-called growth rates to continue. this is not a sign that any massive move will happen in markets. having said that, you talk about stimulus, some sectors, some companies will likely benefit more than others if we get the second wave, also a fiscal stimulus.

in this case, we look at europe more than the u.s., in our case. francine: so what you like in the u.s. right now? for what, you know, what asset class do you like? do you go to fixed income, because it feels safer, or do you also look at equities in certain cases? both,.k: we look at obviously we look, including fixed income. angels, thefallen companies that were in relatively good shape, and this case, we look at the strongest ballast -- balance sheet before both thes, helped by government and the fed, which, in the case of the u.s., is buying corporate bonds. that has been one idea. otherwise, you look at longer duration and sometimes higher risk, because that is the new world in which we are. yield, you extract

have to take some risk. there is no freelance in this case. francine: what do you think of the markets overall? frederik: we have to be very cautious in using exposure overall. having said that, there are two main changes over the last few weeks. first, the dollar has started to depreciate, and this is a trend we see continuing at a slow base, perhaps, that is something that helps emerging markets as an asset class overall. in chinese changes equities, so we have to adjust to this. we have a number of firms and strategies that look at the best companies, including tech, the highest quality stocks as well, because we think there is more, perhaps, in the medium-term band the recent surge in interest that we have seen. i think that single from the government and the state-run media has been very clear about the idea that the bull market in equities will be important, well beyond the pandemic.

so that is another topic we are looking at. francine: we also heard, you know, about an hour ago that china acted to call some of the federal to frenzy. that is what you are referring to, frederik, and it is now this 8-day surge. are you expecting more of, government intervention? has the: the press now monetary policy toolkit, right? because this has been a very strong signal. it is an important communication. we see flaws from inside, which is not only about retaining investors, that could lead to higher volatility, perhaps even a risk of a bubble. it is not only about that. we have seen traditional investors fighting there, and short-term risk, too high perhaps, and beyond

that, the medium-term signal has been supportive in general. francine: frederik, thank you so much, frederik ducrozet from pictet wealth management stays with us. we will talk about the ecb with frederik. later, singapore decides. the city-state heads to the po lls. we are live from singapore later in the program. this is bloomberg. ♪ gram. this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance." i am francine lacqua here in london. let's get straight to the bloomberg business flash, here's leigh-ann gerrans. hi, leigh-ann. leigh-ann: hi, francine. global banks are at risk of

being caught between beijing and washington over hong kong's new security law. the legislation has taken many businesses by surprise, perhaps especially article 29. or hostilesanctions activities against hong kong and china. companies that break that rule will be fined or losing their license, potentially their business. injuries reported by the contraception device essure. a safemarked as alternative, but the fda put restrictions on the device amid mounting complaints. tesla skeptics are underscored by elon musk. thebillion according to

research firm equity partners. it is a candidate for a short wheree, when they are -- short-sellers are forced to close their position, driving the price even higher. and that is your bloomberg business flash. francine? francine: thank you so much, leigh-ann. now let's focus on europe. putting one of their own in charge of the finance ministers meeting. in a secret balance of 19, wonand's paschal donohoe the vote. he defeated other candidates. --ll with us, frederick rose frederik ducrozet from pictet wealth management. what does that tell us about the difference between small and medium countries? are we reading too much into it? frederik: well, i do not know. maybe the finest minister's comments about these small countries carrying small weight backfired somewhat.

there is a relatively small circle of finance minister, but it does suggest that the fight between the so-called "small members" and larger members of the euro area is, you know, being reflected at all levels of decision-making. obviously, the new summit next week will be the opportunity for smaller countries, netherland in particular, which is not a small country, but smaller than germany and france, to express their opposition to a number of members. so it does suggest that the beginning, rather, the end of the battle. francine: we have had a number of interviews with high-profile guests, including the italian finance minister, and, you know, one of the commissioners from the eu, and they keep on saying actually that they are confident that this recovery plan will be voted for. but what bargaining tools today

have with the more frugal countries, to make sure that it actually goes ahead? frederik: i am confident, too, eventually, that we will come to an agreement, because it is in everyone's interest. and i am sure that those four companies feel like that as well. the problem is that the dutch crime minister -- dutch prime minister is facing reelection next spring. so that is europe. we have been there before. it also makes me more confident is there is room for compromise, because it is so complicated. you have to worry about grounds versus laws, about the , that also makes of the possibilities and room for compromise, so hopefully there will be some sort of compromise. there have been some talks,

this week, before eventually in the second step on the principal for this recovery. francine: frederik, does it make a difference if the recovery plan is voted on now or at a later date? frederik: you see signs, encouraging comments on from all sides, saturday next week, we , which also puts the pressure back on the ecb to, perhaps, remain supportive of markets in the meantime, but if you see very hard lining positions from some of those countries on the amount of grounds, net transfers to the companies, sectors, and countries that need it, then that would be a huge disappointment. what are and, well,

you expecting the ecb to do for the coming months? we know the great bloomberg story written by our reporters in frankfurt who says there will be a boost by december, because this recovery is so much more patchy than maybe we initially thought. agree,k: yes, i do september may be more than december, but let's not forget the ppp, the emergency program, looks more similar than the regular qe program, and the sense that it is also designed to address the low-inflation outlook. in that sense, we do not expect inflation to go back to 2%. i expect the ecb to do more. short-term, i think it needs to do a couple of things. first, avoid claiming victory, which is the impression you get from some of those comments over recent days, that the ppp has been successful. yes, it is stabilizing markets. yes, volatility in the bond

market is coming down, but it is not the time to claim victory. maybe next week we will sound a bit more dovish, cautious, highlighting the uncertainty around the outlook. then there are banks, which is another technical topic, but i would expect the ecb to increase the multiplier now that you have beingiquidities distributed across countries, including italy, that will support the banking sector at large. francine: how much is the banking sector suffering from negative rates, even with extra tiering? frederik: without tiering, without everything, they banking sector is paying, if i may, on ing, the, but with tier ecb will reduce close to 0, actually paying back some money to the banking sector for a

short period of time, but the equities at 3 trillion or more for the moment is going to stay with us. this is going to be a permanent income, ands' net that is why it is important to address it not as business as usual, and that is why bacon continues to transmit the monetary stimulus to the real economy. francine: frederik, thank you so pictetrederik ducrozet, wealth management. president trump must turn over his tax returns to new york authorities, but it might be a very long time before they become public. details, next. ♪

>> retail investors have been growing as a more significant part of the market for a number of years, and, you know, self-directed individual directors and a lot of the empowerment that has happened has been the trend for a while, but we certainly saw another piece that functions over the last few months, as you said, in 2019, retail, by our estimations , and because we have a big percentage of the retail volume, we have a pretty good sense of how much retail comprises of the market, was about 4%, but toward the end of last year, with the zero commission changes that started to get introduced to the

market, we did see that start to increase to about 15%. and then if you fast forward to this year, with a lot of the covid-related voluntary -- volatility, we have seen that more toward the 20%, and even on peak days, closer to 25% of the market. francine: that was joe mccain, he head of execution services at citadel securities, -- joe m ecane, head of execution services at citadel securities. president trump must comply with requests for information. that means it will likely stay out of the public eye until after the election. joining us now is bloomberg's annmarie hordern. annmarie, break this decision for us. francine, it was a

split ruling, so this will not be expeditious. the first was a backing ford president trump's tax records. 200 years ago, a great jurist of our court established that no citizen, not even the president, is categorically above the common duty to produce evidence when called upon in a criminal proceeding. we reaffirm that prince of wales -- we reaffirm that principle today. this is a victory for the manhattan d.a., so they can get their hands on president trump's tax returns, but that does not mean the public will see them. the supreme court blocked -- for now -- the house subpoenas, so in that prison, this could be a win for donald trump, and there was an opinion piece in the "new york times," saying that he won because this, will shield his financial records before the election, but he blasted the courts, calling himself "a victim of political

persecution," in a number of tweets yesterday. francine, the bottom line that came out of the supreme court yesterday is that the president of the united states is not above the law, nor does the president have absolute immunity. but when it comes to congress seeking his records, it is limited in its role over the president. francine: annmarie, thank you so much, annmarie hordern without ruling. voters will not see any potentially embarrassing documents from his banks and accounting firms. a push to reopen businesses ahead of the coronavirus only has modest gains, we focus on latin america and the wider picture with yacov arnopolin of pimco. this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance ." that get to first word news

with leigh-ann gerrans. leigh-ann: the coronavirus crisis in the u.s. is showing no signs of abating. cases have top 60,000 for the first time -- daily cases have topped 60,000 for the first time. australia is tightening travel and reviewing its quarantine rules after a recent spike of cases in melbourne. singapore heads to the polls today as a ruling party since two extend its 65 year rule of the state. are beingecautions taken, including temperature screening and the use of disposable gloves. key issues include jobs and the economy, which are set to contract as much as 7% this year amid the coronavirus crisis. in poland, president andrzej duda says he will never allow compensation for jewett property lost in but were 2 -- four jewish property lost in world

war ii. he has shifted further to the right as he faces tough competition from warsaw mayor rafal trzaskowski. and human rights abuses in the province of shenzhen, a major escalation in the white house spat with beijing. american officials have strongly china'sed detention. steven mnuchin says the u.s. will use all his financial power to hold them to account. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more i'm 120 countries, leigh-ann gerrans. this is bloomberg. francine? francine: thank you so much, leigh-ann. brazil's aggressive push to reopen businesses before controlling the rotavirus pandemic is so far yielding modest gains. industrial output and rental,

retail have recovered only part of their losses with restrictions on commerce. brazil is one of several nations in latin america still near the peak of their outbreak. joining us now is yacov arnopolin from pimco. such a pleasure to speak to you. when you look at exactly what is going on in emerging markets, it is difficult to generalize. broadly, do you worry that latin america is being hit really hard by the virus, that the lockdown was not stringent enough, so they don't feel a lot of pain -- so they will feel a lot of pain for longer? yacov: thanks for having me on. i think a relevant question, the reality is we are seeing starkly different outcomes in different countries. which has notuay, had a lockdown, yet the rate of naturallyis very low, the economy effect is going to be more muted, less pronounced

. wee again we look at brazil, are concerned about the rate of infections, how long the crisis will be. how difficult is it to generalize right now, and if you cannot generalize -- actually, we never generalize -- but does it depend on how a leader is handling lockdown, how a leader is handling testing with covid-19? how have the metrics changed depending on h where you put the money? yacov: leadership is important. the crisis was handled aggressively and so on, but at the sometime we have to look at the countries economic parameters, and looking at the response and the impact on these countries through the prism of main factors -- oil prices -- let's not forget oil has also declined precipitously in the

past few weeks and months. tourism.d is we are trying to map out what has been happening in all three channels to see which countries will stand better and which countries will suffer more and where we see higher risk of debt distress on the back of that. francine: where do you see value right now? onov: we have been focusing -- we have gotten a lot of multilateral assistance. the money from the imf, money from the world bank, and egypt comes to mind. they received over $5 billion in another $5 got billion plus in another program and then money and markets. in markets. another example is if you look at the e.u. recovery, there is a andgory of next-generation

european countries, and those countries, if you look at those allocations, the grants and loans, places like romania and croatia are due to receive hefty and inom the euro, romania, between grants and 16%s, they will be between to gdp. -- debt to gdp. probably fare through the shock better. francine: are there any other countries that you think we'll have to get into the program if things don't get better soon? we also had a warning from the recovery saying that for oil demand is at risk from the virus resurgence, so if there is a virus resurgence worldwide, how many more countries will need to tap into imf funds? yacov: i think angola comes to , because ofuntry

their reliance on oil, they have done the very best to negotiate with china, to reassure bondholders. it is important for them to get additional assistance from the imf. there is the other side of the coin, which is quite a few countries are importing oil, and if you look at turkey, with all the other concerns, the fact that turkey will actually suffer huge declines, the oil price drop is benefiting them quite a lot. payments have also improved significantly. what do you see -- francine: what do you see the fed doing in the coming months and weeks? looking at emerging markets, unless things get better all of a sudden, the fed will stay put? we will continue

purchases and i think from the point of view of emerging markets, you have to recognize you don't have a fed, you don't have an ecb. what you do have is the imf, the world bank. the fednd, as long as stays supportive and buying assets, and the ecb buying assets in europe, that should go through the dm by helping support risk assets, by helping keep a lid on spreads, keep a lid on yields, and as a result, it is allowing emerging markets quite low yields and low spreads. so you can say that there is a bit of an emerging circle, and that the fed is helping may be indirectly and that some of this money is financed and developed markets and emerging markets, and em in the meantime is actually active in markets at reasonable rates.

even frontier markets, some of the front your countries, they are still able to access it. francine: thank you so much, yacov arnopolin stays with us. we will focus more on china next. beijing's economic times newspaper mentions a crazy bull market because of emerging stocks. that is coming up shortly, and this is bloomberg. ♪

francine: this is "bloomberg surveillance." this is what i am looking at overall. china state funds started selling as a warning sign for stocks. we understand that china acted to cool the speculative frenzy in its nine point $5 trillion

stock market, ending the euphoric eight day surge that fueled worries of a new bubble in the making. this is what i am looking at for ilt fallingve-year guil to a record low. it seems the market is more comfortable with negative rates in the u.k. the bank of england is also looking at that. we will have a lot more on china and a lot more on the u.k. let's continue the em conversation. beijing has acted to call the speculative frenzy in its $9.5 trillion stock market. equities have snapped a euphoric eight day surge. uneasef the government's emerged when they announced they would trim holdings. yacov arnopolin, what is going on with stocks in china right now? yacov: we see this time and

again. the country is very keen to stimulate its economy and help it recover from what it suffered earlier during coronavirus in the past several months, but time and again regulators are aggressive about speculation, speculation stemming from the euphoria in markets, and that grows shadow banking and so on. so we kind of see this push and pull in trying to make an effort, trying to stimulate, at the same time raining it in shortly thereafter. china is trying to walk you very fine line between the economy without fueling excessive -- francine: what is the biggest concern about china right now? i don't know whether it accelerates the trend that we were hoping we would see with china or whether this means that

china will actually go into a different direction from the rest of the world, and what it means for a portfolio manager. it is vastlyrse, important for a number of reasons. one, obviously for commodity prices, and what will china's economy look like six months fo from here, 12 months for here. metals prices, and iron ore prices. world,emerging-market highly relied on supply chains with china, highly reliant to supplying goods with china, i think we will be watching it very closely. finally, a third angle, which is also quite apropos these days, it has to do with china's relationship with frontier markets. the lending that it has done to africa, the lending it has done allri lanka, i think it

relies on whether they're willing to finance. more importantly, are they willing to disperse more funds given that some of the smaller countries, some of the frontier countries are actually in a very difficult state. i think the market is watching very closely with china and it state actors, some of the bigger state banks acting in the coming weeks and months with regard to east africa, west africa, sri lanka, ecuador, and so on, and they're willing to disperse. do youe: again, where see value? frontier markets seem risky, as they have always been politically, but also because of their health system. is it something that you put to one side to focus on some of these initiatives, or is it something that is always in the back of your mind? yacov: i think it is always in the back of our mind. there are some mid against -- -- coming from the

demographic angle, i think the is 15 to 20n africa years. with a population that may be a little less vulnerable to coronavirus, but i think the economy has been very hard hit. so we are focused on what is imf doing, what is china doing in terms of lending? and whether these countries have market access. we are finding that because quickly,ask that so the economy is actually able to get -- they have capital markets access, and i think that really cushions the blow because they are still able to -- and by getting imf assistance. francine: thank you so much all the -- for all the insight. of our napoleon at pimco. dartmouth professor peter fisher says investors should worry about china seven market rally,

knowing the uncertainty about market earnings in china and the u.s. following the coronavirus pandemic. for a the chinese economy long time, one of the few places uncertainty about the future can get expressed is in the equity markets. the credit slice of the capital markets, the government does not let a lot of corporate's default. the government sort of anchors that, and therefore more of the volatility is going to show through in equity markets because that is where it can be expressed. the chinese equity markets have been pretty volatile over the last 15 years. you referred to the most recent past episode. so i think it is worth thinking about that. investors have a short horizon where the future is uncertain. we don't really know about the future income for u.s. companies or chinese companies over the coming couple of years. we are focusing on a short horizon. i think it is time to worry a little bit.

authorities did correct that -- look up authorities did -- >> authorities did crackdown on financing. gold is at its highest level in nine years. which you could argue that investors like china are coming back in the market. means, like maybe they are recovering. peter: you alluded earlier in the show to everything rallying, buy everything, and maybe that is the case. but i would emphasize, we know that we don't know what the future path of corporate revenues is. and yet equities have rallied in the united states and in china and elsewhere around the world. we in the u.s. have not had the kind of stability of the virus that you would like to see to start having confidence that the path of the economy. i would like to emphasize, it is sensible for a certain set of

investors to focus on the very short run. is speculative activity, that's what they're doing. and bless them. enoughn we don't have information to say much about the future path of earnings, then we are left with the short run animal spirit striving prices higher. guy: you take a look at why that is happening short-term, liquidities a very significant factor behind the rally -- and we will talk about this later in the program with another guest -- do you get a sense that when you look at the money supply charts, that at some point they become inflationary? clearly the short term trend at the moment is disinflation, but at some point, i would be curious to get your take on this and your experience, do you think that at some point will turn? peter: i do worry. let's talk about the odd possession -- odd position the

fed seems to be in, and then we will talk about inflation. both the current and former heads of the fed are talking about the run up to m2 is not going to be inflationary because of all of the money is trapped in the financial system and they are paying interest on it. the same places tell us it has nothing to do with why equities are rallying and why all assets are rallying. really? it is neither of those things? it is neither a way to stem late the economy and generate inflation, nor is it a way to pump up asset prices? and why are you doing it? so it is odd talking about asset prices and what they are doing. it is further off and a little subtler. inflation comes from too much money chasing too few goods and services. it is the chasing. so demand relative to supply, if demand accelerates more than supply, we can get a little inflation. and what we have now, what i

would like to describe as a stop-go economy. this part is shut down for covid, that part doesn't work. this nationalist sentiment shuts down this part of global trade. there is a lot of sentiment on the supply side, some of the coming online, some of it not coming along, and we ought to brace ourselves for the possibility of stagflation. francine: that was dartmouth professor peter fisher. coming up, the city states had to the polls. we will bring you the latest next. this is bloomberg. ♪

francine: economics, finance, politics. this is "bloomberg surveillance ." singaporeans are currently voting in the city state's general election. the prime minister's ruling party is seeking to extend his 55 year rule with a fresh mandate. special precautions such as temperature screenings but also the use of disposable gloves are being implemented at polling stations. turning us is bloomberg markets reporter juliette saly.

how hard will it be for the government to hold onto this mandate in this unusual environment? that is the key word because everybody going to these polls is focused on how the government has handled the coronavirus pandemic, it also the impact to themselves, and jobs is really at the forefront. you have employment at an all-time high. there are fears that the singapore economy will have its biggest contraction since its independence in 1965. the government is still hoping for what it says is a strong mandate it is hoping to hold onto. it is worth noting that in the last election come in 2015, with 70% of the popular vote -- even if they don't get a strong mandate this time, the government has said they will still be able to rule and govern at singapore and later into the future. this is a future where they are hoping to focus on climate change in investment, ai as well. it comes at a time when

singapore is grappling with the pandemic, as is every nation around the world. there have been some 45,000 cases of the virus, mostly in migrant worker dorms. but still the government is campaigning in this different environment online, of course, with the vision that it has handled the pandemic reasonably well. there have been very few deaths in singapore. but if we do face something like a smaller mandate, similar to what we saw in 2011 when they got only 60% of the popular vote, then you could expect some soul-searching in the government, and that could also delay prime minister lee's plan to passover leadership when he turned 70 in about 18 months' time. francine: thank you so much for the update. juliette saly from singapore. we are getting breaking news on the markets. ofnt crude hitting a-day low 41.53. we did also have the iaea say they were worried about a second

wave of coronavirus, and that would actually -- i guess the virus resurgence they warned would actually put demand recovery at risk. "bloomberg surveillance" continues. in the next hour, tom keene joins me out of new york. we will also be speaking with mohamed el-erian. a lot of the focus will be on the euro group, on the e.u. recovery plan. this is bloomberg. ♪

francine: california, texas,

florida sees record deaths from the virus. new cases in the u.s. top 60,000 for the first time. paschal donohoe is the new euro group president. in k rebuked -- china stock rally cools as the state funds start selling, a sign the government wants to start to slow the surge. this is uber surveillance. i'm francine lacqua in london. tom keene in new york. tom, a lot of the focus is on what we saw in china. we saw that incredible rise in stocks with chinese authorities saying maybe slow down a bit, and the focus on the euro group, and what we are seeing in the u.s. with the number of deaths rising by the day. tom: the virus is front and center in america. it is extraordinary to see the different stories, geography. the