haidi: good morning. we are counting down to asia's major open. shery: i am shery and in new york. welcome to "bloomberg daybreak: asia." asian stocks looking to track u.s. shares lower as they wrap earnings.c affected mcdonald's and starbucks affected the fed concludes policy meetings later.

a look at howake we are shaping up in this part of the midday trading week. pretty muted start when it comes to trading in asia. futures lower. snp active futures higher by 1/10 of 1%. u.s. stocks dropping overnight with investors weighing disappointing bigger earnings including out of mcdonald's and a mixed bag out of starbucks, calling into question the strength of the u.s. consumer recovery and rising virus cases continuing despite incremental developments on the vaccine front. chicago nikkei futures ahead of big banks up 1/10 of 1%. the bloomberg dollar index is slightly negative at the moment although taking a bit of a actuallyat this point, pretty mixed in the g10 basket. we had the biggest decliner, the kiwi, the aussie dollar also halting. some losses in the overnight.

gold had been dating albeit modestly but we have a downside of 3/10 of 1% after hitting a record high. $2000of analysts saying is still within the realm of possibility. shery: let's get to the first word headlines now. the federal reserve is extending most of its emergency lending programs by three months through the rest of 2020. the programs were designed to keep credits through markets business and local governments during the coronavirus pandemic. the facilities have the potential to deploy trillions of dollars but only a fraction has been used. the fed releases the july policy decision later. u.s. attorney general william barr has been defending himself before house democrats on capitol hill who say he abused his power and politicized the you justice department to help president trump and his associates. it was the first time he has appeared before a committee and

the democrat-controlled house before he -- since he became attorney general 17 months ago. >> the president has not attempted to interfere in these decisions. on the contrary, he has told me from the start that he expects me to exercise my intent and judgment to make whatever call i think is right. former primeia's minister will appeal after being sentenced to 12 years in jail the 1mdbfirst trial in scandal. he was found guilty on seven counts of corruption involving around 10 million drawl -- $10 million that found his way into personal accounts. he also was fined around $50 million. the verdict came after goldman sachs agree to a $3.9 billion settlement for the malaysian government. south korea's consumer confidence improved for a third straight month in july, offering another sign it is pass the worst of the pandemic. the consumer sentiment index

rose to 84.2 this month up from 81.8 in june. however, despite the improvement, the gauge has yet to reach pre-virus levels that exceeded the 100 threshold, which separates optimism from pessimism. haidi: deaths passing 650,000 thousand. new infections slow in california while florida record a record number of deaths. it's bring in our coanchor yvonne man in hong kong. reports are saying the government is pruned -- considering postponing legislative elections because of the virus. yvonne: multiple reports are saying they could announce a delay in early august now. there's another report saying they proposed to the national people's congress on possibly extending the term for current ledge co. members for the current year.

the call is growing to delay the vote. lam'sexecutive carrie advisor says it is looking more challenging to hold the selection now that we have seen more than 100 cases per day for the past seven. he also says he just doesn't see september getting any better and they have to prepare for the worst. the pandemic has basically made traditional campaigning difficult and it is still too early to tell if hong kong, the third wave has. tougher social and seeking -- social distancing measures are being enacted. a hong kong activist has said pandemic are using the as an excuse to postpone the election. it is a lie, he says. this is after more than half a million hong kong residents voted in the unofficial primary. is, ahow sensitive this

delay may prompt more protests. wanted member says china to delay the election to avoid a potentially devastating defeat and because it was where the u.s. could improve -- impose further sanctions if opposition candidates are disqualified. but there are legal challenges. islaw, the chief executive allowed to delay the decision but a new election date must be chosen within two weeks of the original date. you also can't delay in election twice. there are some obstacles ahead. shery: on the virus resurgence, we see cases surging in india, approaching 1.5 million. what do the next few months look like? yvonne: it is going to be tough. as you mentioned, the third highest in virus cases in the world's india and they are only following the u.s. and brazil right now. tuesday they saw daily virus cases jumped more than 47,000

and pushing the total now near the 1.5 million mark. the death toll also climbed to 33,000. it is still tough to say if this country has seen the worst of it. experts say they don't expect it to decline for some time, but at least when it comes to fatalities in the country comparing it with the overall population, that has been significantly lower than other countries. testing still remains low despite the jump in cases they have seen in the country. the philippines and other potential hotspots as well, the country weren't -- warning of their health system close to being overwhelmed by the rising cases. covid amnon covid beds are close to 50% capacity in the country now, which is in the warning zone. the philippines added more than 1600 new cases, bringing the total to nearly 84,000. they are of course the second-highest most affected country in the southeast asia region. nationwide, ventilator usage is

still manageable, but in the capital region, intensive care and ward beds are in higher danger zones. shery: yvonne man with the latest on the global virus infections. still ahead, japan's banks facing sharply higher bad alone costs -- bad loan costs, but the damage is unlikely to show in fourth-quarter reports.we will discuss why with morningstar. this is bloomberg. ♪ r. this is bloomberg. ♪

shery: goldman sachs has put a spotlight on the growing concern over inflation in the u.s. the bank issued a warning that the dollar is in danger of losing its status as the world reserve currency and recommended investors keep buying gold. joining us to discuss is ubs fx and micro strategist vassili serebriakov. even before goldman sachs said anything about this, we had concerns about the dollar as a primary world currency.

we continue to see that not only in the eu stimulus providing support to the euro but also the slowdown in monetary policy easing coming from china and perhaps providing support for the yuan. what is the long-term view for the greenback as the primary currency for the world? >> we are dollar bearish for a number of reasons. i would say every time we see dollar weakness, the reserve currency status comes up and we don't see that is seriously challenged. nevertheless, it doesn't mean the dollar can't weaken. we expected to continue weakening. but the main reasons are not so much reserve status, but cyclical reasons. recovery post covered -- covid recovery that's going better in china than the u.s. wesaw the recovery fund and expected more fiscal stimulus. we have seen a stronger credit impulse in china. those are the factors that help

drive the dollar lower along with record low u.s. real yields we think the fed will continue to keep at low levels going forward. shery: the yield premium no longer a source of support for the dollar. take a look at this chart on the bloomberg, we continue to see oversold levels for the dollar though. the most oversold levels of the last decade. we will try and get that chart up as soon as we can. my question would be is it ready for a rebound, given how much of a downturn we have already seen in the currency? >> it does seem a little too fast in the short-term, i would be sympathetic to paying attention to rsis and thinking we get a bit of a bounce in the dollar. it is possible the fomc meeting will be a little disappointing for those looking for something dovish. we think it will come eventually but we think it will be in

september, so that can be a chance for the dollar to rebound, but i think it's mainly corrective. i don't really see anything fundamentally that would change the course for the dollar, unless we see a major risk off event, trade tensions escalating. it needs to be a significant derailment to the global economy at this point. haidi: we are just getting that chart up, the dollar getting ready for a potential pounds. how much of the dollar demise has strengthened these pairs? strengthen the euro on the prospect of a better recovery and the aussie and the kiwi amid the pickup in risk sentiment and also strength but at least stability in the chinese yuan? >> it is definitely important. i think part of the dollar strength over the 2018-2019 period is the yield diversions, the dimensions and higher yields in the u.s., but also that there

are so few good stories outside of the u.s. in terms of equities and asset classes. and the fact that europe seems heret their act better with the recovery fund and the strongest credit impulse in china since 2016, it has helped investors put their money outside the u.s. and they have stayed in the u.s. for a long time. this is investors overweight u.s. assets and they are looking at other countries and opportunities. haidi: in terms of the em space, we are seeing a lag, i guess not as exuberant equity. what is the catalyst that changes that for the second half of the year and what are your favorite pairs in that space? lagged,s really actually. there's a fairly big gap between the g10 dollar and em dollar. em currencies have struggled a

little bit for a number of reasons, idiosyncratic reasons like dealing with covid, some ongoing u.s.-china tensions. we still think they will continue to lag. a couple of things that would help, further equity inflows which have been relatively soft, and trade the escalation but it might need to wait until the u.s. election. i would say the currency we lack in asia is the korean won. we think it is well-positioned cyclically with the rebound in tech we expect and latin american variances like brazil and mexico are still quite undervalued, a lot of risk premium. they could rebound as long as the global recovery is intact. shery: what about the japanese yen? we continue to see significant strength and raking close to the 105 level. >> we have been kind of

patiently waiting for you and strength along with investors who have been frustrated with dollar-yen being second rate for a long time, but it's finally moving. a couple of things, one is the , that u.s.story yields have come down significantly. . it points to dollar-yen as 100.tially low as also, we saw a spike of buying in foreign equities by japanese investors about a month ago, but it has subsided a little bit. the question about dollar-yen is , is the boj going to be concerned? and the ministry of finance. i would say probably not yet unless the move is strong and fast. before we let you go, tell us about your convictions for the aussie and why 74 is

upside from here. we have been on consensus for the aussie for a while but it has been delivering. part of it is fairly strong post covid recovery. right --ove back backtracking with a rising covid cases, but we see a lot of foreign demand for australian fixed-income. rba has been able to stop qe in early may. it's in a very comfortable position few central banks have. the commodity complex has been quite strong thanks to the re-acceleration of china credit. moment, all signs point to aussie trade. the only thing i would say is the period of rapid gains behind us, i think it is more of a slow grind to 74 from here in our view. haidi: great to have you and your views about ubs fx and

macro strategy, vassili serebriakov there. more on the fx outlook in today's edition of "bloomberg daybreak: asia." on the terminal and it's on the mobile in the bloomberg anywhere else. coming up next, mortgage backed securities. ellington management says this time they will present value. an exclusive interview with the founder and ceo is next. this is bloomberg. ♪

shery: mortgage backed securities were to blame in 2008 for the market collapse, but list time they represent value, according to ellington management founder and ceo mike vranos, who oversees $11 billion in assets. he spoke to bloomberg about the value in buying nonagency mortgages and why he is reeling -- willing to take risks right now. >> on the 22nd of march on that

sunday, we saw a reit's that could not reach margins calls and things devolved into a cash grab. and there was a lot of indiscriminate selling. unlike 2008, mortgages were not the cause of the problem norwood selling them be the solution and this was a classic case of the baby thrown out with the bathwater. since then we had ellington have put $3 billion to work in nonagency and other mortgage securities since the third week of march. there is a lot of dispersion of value in the market and that is where you need a lot of expertise. there's a tremendous amount of .alue if you look even to previous other quantitative easing's, they have increased mortgage holdings by 500 billion paid outs at that time the fed now

owns about 30% of the $6.7 trillion agency mbs market. you can see tremendous support in the market and even compared to the other markets, you can see this buying from zero march 11 to almost two point $5 trillion in assets in a relatively short amount of time, three or four months. >> i guess the question is, what did you buy, what did you sell? what did you trade? arch was a scary time and nobody knew the fed would step in the way they did. you took a big risk. now what are you doing? >> so basically, you have to power for these sorts of events. this was the third or fourth one my timeseen including and wall street. it wasn't as bad as other ones. you just need to manage tail risks. if you have cash and you ask

quite -- clients, come along and raise money, we put money to work as opposed to selling, and most of what we bought were nonagency mortgages. thosetalk about each of investments. particular took a beating in march. ifce the beginning of 2019, you look at the ishares mortgage droppedtf, that has about 40% in price. this is a composite of agency, hybrid and commercial reach. even probably as interested is the price-to-book of constituents that are in that index have dropped from over to 70,om about 90 meaning not only are the prices down, but the actual discount

and underline value of mortgage portfolios is also down. we see tremendous value. down.ton's reit efc is reporter: let's talk about the nonagency part. that is the risky part. how did you find the value there, and if we don't get another round of real good stimulus, if we don't get a solid extension of unemployment benefits, does your view change on these? >> it doesn't change a real lot. that's a very good question. there is no implicit or explicit backing to legacy nonagency mortgage securities. in mind please keep these loans have been outstanding on average about 15 years and the homeowners have paid through 2008 they want to hold on to their homes. we feel there is down -- little

downside in the securities because of the low value in the loans. legacy residential mortgage-backed securities have housing price appreciation loan devalues of about 50%. for a typical are aware, the loan outstanding is only half of the homes value. investors are most likely going to get their money back if they buy securities by these loans. shery: haidi: and that haidi: was the ellington management founder and ceo, mike vranos. a quick check of the latest business flash headlines. credit suisse is set to announce a major overhaul of its business as the ceo seeks to tighten control and boost performance of investment banks. the lender plans to merge the investment bank and capital market which has posted a recent loss into a resurgent global market division. the bank expects to combine the risk and compliance. after shares rose 4%

raising the for your revenue for kospi the new guidance suggests farm on giant -- that they are along front runners in the race for the covid-19 vaccine and could be ready for approval by regulators as soon as october. shares in advanced micro devices searched after hours in a bullish forecast suggesting the company's winning orders from larger rifle intel. it will be around 2.5 billion dollars which beats estimates and they raised the four year forecast in the second quarter. amd has slowly caught up to intel with the help of its factory in taiwan semiconductor. let's get a quick check of the currencies around the region. the japanese yen holding steady about 105 level. we have seen incredible strength for the japanese yen at the strongest level since march and

we are close to breaking even with the 105 level against the u.s. dollar. the offshore yuan holding steady around the seven level. this has to do with what is happening around the u.s. dollar and we continue to see a weakening trend. we have seen some positive data out of china with industrial product growth jumping 12% year on year in june and we are awaiting pmi -- later in the week. the aussie dollar, $.71 u.s., but it is at the strongest level since april last year. the korean won not doing much after we saw a volatile week for the korean currency this week. next, analysts look for clues in starbucks and mcdonald's performance in china as to how the chains will perform in the rest of the world. this is bloomberg. ♪

karina: i'm karina mitchell with first word headlines. the u.s. government's top diseases infections expert says he's confident a vaccine will be found before the years and. bioteches as pfizer and began later stage tests of a treatment starting after the moderna trials this week. cases in california and arizona have slowed but there has been a spike in florida and new jersey. the philippines are in danger of eating overwhelmed -- being overwhelmed in hospitals. they have the second highest

rate in southeast asia. hong kong has reported more than 100 new cases for the seventh straight day. stricter social distancing measures take effect wednesday. staying on hong kong, the gdp is due out later for three months through june with analysts forecasting a spike in activity on the quarter but still a contraction of more than 8% on the year. herrding to carrie lam and advisers, they are considering postponing september's legislative elections. the united kingdom is considering easing the quarantine restrictions for travelers returning from spain after a backlash from tourists, airlines, and the spanish government. potential measures include reducing the length of time to isolate down from 14 days and targeting specific regions rather than the blanket map. spain is the uk's most popular summer holiday spot. global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries.

i'm karina mitchell. this is bloomberg. shery: it is a busy day in earnings season. starbucks and mcdonald's still feeling the pain of the coronavirus pandemic. investors had different feelings about their latest results. hours.ks rising after mcdonald's fell in regular trading, tracking both is our senior analyst for bloomberg intelligence. let's start with starbucks. what did you see in the recovery report after the grim preannouncement in june? reporter: it is interesting. they definitely did a good job of managing expectations. some pretty bad numbers back in june that they were able to beat this month. that really helped results. but if you dig deeper into the

numbers, starbucks is still doing much worse than a lot of quick service competitors. part of the reason is they only have about 29% of their stores with a drive-thru. another big part of it is the fact that breakfast has been largely impacted here in the united states because of so many b,ple a, out of work, and telecommuting more often. breakfast sales have been hurt industrywide and starbucks has a .arge exposure to vector sales numbers,en it comes to pretty grim and investors reacted, but where are we seeing recovery? reporter: it's interesting because the stock has done well after hours and people are latching onto the fact that management said sales in july are positive at about 3100

stores. the stores that were able to stay open throughout the pandemic. however, i think it is important to focus and remember the fact that if those stores picked up sales from a store that was closed. once all the stores are open, we do not expect positive store sales to continue and i think management, what they pointed out about 2021, may be a shock to some investors. the stock is trading up pretty good right now. in 2020 one, management said the margin recovery will take a couple of quarters longer than the sales recovery. one,ement thinks fiscal two, china thing sales recovery and then two months later margins recover. the u.s., we are talking about second quarter recovery which is

not a big surprise, but it is a surprise starbucks management does not think they will recover 4q 2021 at the earliest here these are based on a best case scenario also. management said this does not include additional waves of the virus and does not include any macroeconomic challenges, which we may end up seeing in the form of a deep recession. haidi: great to have you on with us. halen, with a look at starbucks and mcdonald's earnings. coming up, earnings continue to roll in with japan's mega bank set to report. tomorrow, we hear from the morningstar equity analyst about what to expect, michael makdad. this is bloomberg. ♪

shery: less than half hour away from the opening trade in japan, korea, and australia. let's go to sophie for what to watch. sophie: we are seeing muted moves on a comes to futures price action. up about 1/10 of 1%. nikkei futures in singapore

opening lower by one third of 1%. ahead of boj bond buying on the short end, jp be set to track the rise and treasuries which flattened overnight and we saw the push of the 10 year yield lower. aussie bonds opening higher before cpi data due out in two hours, expected to show deflationary pressures. turning to the credit markets, i want to mention the trend in the asia dollar bonds. spreads have dropped for a record 13 straight weeks as stimulus has taken down risk premiums and so borrowers have taken advantage with issuance at a shed near all-time highs. at least five companies marketed dollar bonds tuesday ahead of the fed decision. switching out the chart, feds are likely to continue grinding lower as investors hunt for yields while the global pile of negative yielding debt loads up yet again, back above $15 trillion at the highest level since september. banks withnese

sharply higher bad loans due to the pandemic, a familiar refrain for the banks. the damage is unlikely to show through first-quarter earnings reports. joining us from tokyo is michael makdad, senior equity analyst at morningstar. when it comes to these provision numbers, as we continue to watch for all banks globally, this might not be the worst of it for japan's big banks? >> that's correct. the april and june quarter is for the japanese banks, the fiscal first quarter. also the japanese banks provide ago,nce, so three months the targets or forecast, which included guidance for credit 2021 inr the year march. smsg, 65 basis points.

so to some degree, we know where the banks are looking and probably when they give guidance levels like that, some of the banks you normally would expect to come in better than the guidance they give, it gives us space. for the fiscal first quarter, if ,e look at the default rates there's not a lot of reason to have elevated levels of credit. if you look at delinquent fees, that has not changed that much in the last quarter. to the degree they are able to do forward provisioning, that is what we will see. haidi: how much of that is down to the $2.2 trillion virus related stimulus program we've seen from the government, and we

have seen the boj extend the business lending program -- at what point do we begin to see that paper and the bankruptcies and the impact on the labor market starts to show through as well? >> the japanese economy, if you look at the economic trends on bloomberg, you will see it was quite weak before the pandemic. the october to december quarter of last year, we had the consumption tax hike in japan. i think the government was looking forward to the olympics and thinking the economy could deal with that. but we did not have the olympics , so the economy has been in a weak spot. as for when this is going to create credit costs, we are looking not just into the current fiscal year and next march, but basically we are waiting to see, we have guidance for the current year but the year ending march 2022, what is the outlook or that? the banks themselves don't know,

but i think that's what we are looking forward to. shery: what are we expecting from nomura? we are seeing big global banks do well when it comes to large fluctuations in the markets. what are we expecting for the time when sources are telling bloomberg that they cut double of jobs in the u.s. investment? >> i look across japan and korea and subsectors of financials. securities has been a relatively bright spot. there has been a couple of japanese regional banks and securities that have reported earnings. clearly japanese securities companies were in a tough time a year ago and they are rebounding. for nomura as well, despite the pandemic, it wasn't a critically tough environment for them and i wouldn't be surprised to see pretty good results actually. shery: when it comes to the

global banking industry, we have seen the likes of credit suisse expensing -- expecting to merge investment banks and the trading unit. see kind of changes when we the financial industry in japan, given that they are facing pressure from so many side? looking at the three megabanks because they are the largest, but when we look at the local level of smaller banks, i think clearly japanese regional banks are really going to be -- one thing to look at is what is the level of credit cost that the banks would go from between having a prophet or having a loss? as interest rates have come down and japan, that has come down. loans thatints of are already producing a loss. that is taking away from capital over time. there's no outlook for interest rates to come back up, that is where i think it will prompt a lot of these banks and they will

have to basically decide what to do. they have been trying to somehow muddle through. but in the next year or two, there comes a time when modeling through won't be an option and maybe we'll see similar to the early to thousands or to some degree after the financial crisis in 2008 and 2009, we will see consolidation and reordering of the industry. expect toyou would see, as we heard from nomura, or the report out, that we would see rightsizing when it comes to financial workforce then? banks, absolutely. doingere already multiyear cost cutting branches, but the security companies like nomura are a little faster in .erms of the cycle

japanese brokerages a year ago were in a cost-cutting mode. to some degree, in the short-term cycle, that cost-cutting may have passed. nomura, they will do cost-cutting but also selective expansion in areas where they see potential for growth. shery: morningstar is michael makdad, great to have your views. thank you. coming up, the pandemic hitting nissans bottom line with the japanese carmaker forecasting wider than expect it operating loss. the details, next. this is bloomberg. ♪

haidi: the iconic motorcycle restructuring plan undermined by the pandemic. sales and the u.s. have been in a five-year slump and the new ceo has embarked on a crosscutting spree shedding roughly 14% of the workforce. shares fell by 11% before recovering by the end of the session. shery: a tough road ahead for nissan. the japanese carmaker expects wider operating losses forecast even as it scrambles to cut costs. let's get the rest of the story from global business editor dave mccombs in tokyo. what's the biggest of the many challenges that nissan faces? reporter: you touched on part of it. you said they are focusing on cost cuts. that is an imperative for them to survive to reduce costs and at the same time, they have to

come out with new models, which becomes difficult, if at the same time you're talking about increasing the job cut target to 14,000. your shutting down assembly lines, contracting is a company. at the same time, you need to be coming out with models that are competitive with the new models of rivals. that is important in the electric car market which had been a strength for nissan. but under the current condition where they are contracting is a company, they are pressuring suppliers to cut costs. it is difficult to come out with hit models in that circumstance. that is the biggest of many challenges, getting back on track with big models and it ties into what their strategy has been in the past, which has been to focus on volume. that was carlos ghosn's big strategy, to take a lower margin than his rivals. in some cases, getting about half a margin that toyota gets on their vehicles. but they made up for it by

increasing production. now that they are cutting back, it makes the strategy impossible. haidi: what does that mean for nissans alliance with mitsubishi? reporter: upfront, nissan said yesterday they are forgoing the dividends. that is $1.2 billion that comes nett out of renault's income. that's a big hit to them. this is always been a big question. outside of the dividend, why are we aligned with nissan? that is something the company's management has always supported but the shareholders may not be if the dividend is not forthcoming. in the crisis the company now faces, there is less and less -- forle or maintaining maintaining this relationship. that could be if renault reduces the stake, it could be a very bad time for the company's shares given the size of the

stake they own. mitsubishi, as they know -- we know, a day earlier announced they would stop producing one of the biggest models over the years, the key suv. that is the company also not hitting on all cylinders and alliance.e nissan it seems to be weakening and the management has yet to come up with a compelling plan for how to restore the alliance and how to get it back on track to compete with the giants like toyota and volkswagen. shery: when it comes to different markets around the world, the idea for many businesses has been china is the first in and out of the pandemic and greater exposure in the market could help. where -- are there any bright spots for nissan at this point? reporter: geographically, china had been a bright spot for nissan, but the market had actually been in a contraction

even before the pandemic hit. but as you mentioned, there is some expectation it would come out a little quicker so it is a potential for them. their brand name is strong within the chinese market. some of the cars are very popular in nissan and it is a big market for them. it is one possibility. another strength for the company not geographically, but the balance sheet isn't terrible, they are in a net cash position as of the end of last fiscal year. i have some strength of financially and some ability to plan for a year ahead and come up with another revitalization plan. i'm pretty sure china would be a significant part of that but it has been a big part of the mix in the past. haidi: our global business editor dave mccombs in tokyo. the french automaker psa group

is sticking to its financial outlook even after profits slumped in the first half of the year. speaking to bloomberg, the ceo explained why he is optimistic when it comes to the second half. >> what makes us confident is the fact that over the last six years, we have worked extremely hard to reduce the breakeven point of the company. it is now around 50% of revenues. we have become a very resilient company, very agile, and the numbers for the first half of 2020 demonstrate this resilience, hence the fact that we have strong convictions that we will respect this floor guidance on average over three years 2019, 2020, and 2021. it.ill stick to demonstrate in20

the pnc group. reporter: you also talked about how you are determined to achieve a solid rebound in the second half. how do you plan to do that if demand remains suppressed? we haveg the lockdown, a rigorous management of inventories. we have a very significant reduction of the total inventory by around 24%, which means we are entering h2 with very low inventory. the manufacturing system is very smooth and efficient and we see the plans are coming back in a way that is satisfactory from a cost and quality perspective. in terms of manufacturing the supply chain, the rebounds are smooth and the level of inventories entering h2 is very low so we expect to invoice a significant number of costs in the second half cared of course pending the fact that we would like the overall economy to bs

civil as possible, but we think the conditions are quite promising. reporter: at the same time, you are dependent on the european market which is recovering very slowly and in large part due to incentive themes in big markets like france and germany. are you in favor of these incentive themes? not in favor of incentive schemes. we are not in favor of any initiative to distort the market conditions and we would like to make customers happy directly with no distortion. , likecourse enjoy competitors, from those schemes. the order book is extremely good right now. by the end of h1, we were 15% up against last year. the order book is stellar given the attractiveness and appeal of the new products.

the order book is very good and inventories are low, conditions seem to be reasonably favorable and this is something we can enjoy thanks to the supply chain that is rebounding in a very effective way. shery: that was the psa group tavares.s breaking news. , china reporting 101 new coronavirus cases on july 28. we continue to see a surgeon cases. we have seen about 68 new cases yesterday. escalation,ly an the worst flareup since march. china had contained its first epidemic after 80,000 plus infections and china reporting 101 new coronavirus cases on july 28. coming up on daybreak asia, the outlook with new pond capital partner. and we speak with the weather

intelligence start up seeing floods reeking havoc around asia in the coming weeks. this is bloomberg. ♪

♪ shery: good evening from bloomberg's global headquarters. haidi: asia's major markets have just opened for trade. welcome to daybreak asia. asian stocks are set to track u.s. markets lower as traders digest a raft of pandemic affected earnings. among them, mcdonald's and starbucks. coronavirus cases surge in southeast asia and india. the philippines issues a worry

about hospital beds. the good times keep rolling for china's biggest domestic real estate company. a 13% rise in profit. let's get straight to the market action with sophie kamaruddin in hong kong. moments ago, we got the latest virus case cap from china. that may dampen the diminished enthusiasm in today's session. the nikkei 225 up one third of 1%. topics also moving to the downside. the yen holding onto a four-day game and four-month high. a few technical barriers in place. investors may stay on the sidelines before the fed decision. jgb's getting to -- gaining ground. the yen climbs further. u.s. yields extend declines. the u.s. 10 year yield just

below 60 basis points at the close on tuesday. we are keeping an eye on nissan. earnings on tap for japan, number a, asahi. checking in on korea. gaining ground by 2/10 of 1%, extending its advance for a third straight day. as we digest the improvement in korean consumer confidence, the korean won strengthening ever slightly after being driven to a three-week high amid dollar weakness. ind the pickup we are seeing covid death issuance in asia, higher rated notes and korea are commanding a premium over risk you issues -- riskier issues. turning to australia. asx 200 opening flat this morning. material stocks have been a bright spot this year with listed companies delivering

returns of 100% in 2020 for the sector. the aussie dollar trading slightly higher, holding a three-day game. cpi data is likely do so -- to show deflation. assess if the peak is around the corner for boy in. dollar weakness still in place. that dollar decline fed into a deeper correlation between asian stocks and currencies with that link at the strongest since 2013. shery: let's get more on the market action with our next guest, a partner at mequon capital who is overweight asia with a focus on china. she joins us from california. great to have you with us. when we talked about the resurgence of the coronavirus pandemic in china, more than 100 cases reported in the country, will the resurgence of the virus threaten the market rally we've seen so far? pooja: thanks for having me.

in terms of the market, the market rally is going to be less broad-based and more selective. year to date, if you compare the u.s. with china, the market in china has been more broad-based. going forward, you will see more differentiation between stocks that will be impacted by covid that accelerated because of covid. internet direct retail or even health care, pharmaceuticals. you will continue to see greater stock returns. it's a difficult environment for stock selection. not the same broad-based rally we thought earlier. shery: you are shifting from taiwan to china. why? this week, we saw the rally in

tsmc with news flow from intel's latest worries taking the taiex to new levels. pooja: that's right. taiwan, we remain overweight taiwan but we are selective of the stocks we are investing in. it is not a broad-based view, but rather selective stocks that we like. like isn, a stock we momo.com, a large retailer in taiwan. the company is growing at 20%. our taiwan story has been more domestically focused, looking for growth opportunities. the semiconductor space in taiwan has rebounded and done very well. we are shifting more towards china. that's because we are seeing more opportunities in that space in china now. haidi: given the more assertive

, what kind ofment trading seen will emerge from that? focus in china, they have doubled down on their focus to emphasize high-end manufacturing in china. there ise key examples they are going to have 70% of all chips that are being used in china to be made in 20 -- china by 2025. currently, that number is less than 20%. you are talking about a forex growth in chip manufacturing in china. the way we see this evolving is, we will see the development of the whole infrastructure around high-end technology. that will include things like ai, robotics, biomedicine, as well as infrastructure around 5g , telecom, renewables. our way to access this is to look for stocks that we think

are going to have sustainable growth and that will be supported by the government. much stock is very by stock. active stock selection opportunities across the world space in china. shery: what about the strength of the chinese consumer? them beatingo see expectations, even amidst a pandemic driven slowdown. are their names in the consumer space that you be interested in at this point? china hast's where the rest of the world. the structural growth story of rising in terms is intact. stocks like consumer appliances are being driven more by the long-term structural story. see stocks as attractive on a long-term basis. we have positions in those.

i think the made in china story, the technology infrastructure story is a long-term play versus the consumer upgrading story as an ongoing structural story in china. haidi: that's a really interesting theme to invest on. let's take a look at nissan shares in the early part of the tokyo trading session after the carmaker forecasted a bigger than expected operating loss. the number coming in at $4.5 billion. it is struggling to restore profitability and volumes when it comes to sales. down by over 5% on that whiter than projected operating loss for the current fiscal year. it has been trying to dig itself out of that fiscal hole by shutting down assembly lines and conservation of cash. they are looking at 4.5 billion operating loss for the year

ending in march, which was worse than expectations. still ahead, a preview of hong kong's gdp release. economists are expecting the second quarter to match the record decline we saw in the first quarter. hurdles remain for the stimulus plan that is being negotiated in the u.s. nancy pelosi says the gop bill is unlikely to pass in the senate. we will discuss the holdup, next. is bloomberg. ♪

karina: you're watching daybreak asia. the u.s. government's top inspectors disease expert says he's confident of vaccine for the coronavirus will be found before year's end. pfizer and biotech began later stage test following the start

of moderna's trials on tuesday. deaths in florida hit a record high. the was a spike in new jersey. cases in california and arizona have slowed. the philippines is warning that hospitals are in danger of being overwhelmed. the philippines reported 1700 new cases on tuesday, taking the total to almost 84,000. hong kong has reported more than 100 new cases for the seventh straight day. social distancing measures come into effect wednesday. hong kong gdp is due out later for the three months to june with analysts forecasting a pickup inactivity on the quarter but a contraction of more than 8% on year. according to carrie lam and her advisers, they are considering postponing the legislative elections, blaming the surgeon virus cases. the united kingdom is considering easing its quarantine restrictions for

travelers returning from spain after a backlash from tourists, airlines, and the spanish government. measures include targeting specific regions. spain is the uk's most popular summer holiday destination. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. shery: a few issues were both sides are in agreement but there is far more points that they don't agree on. let's bring in kathleen hays for the details. what are the key areas of contention and the potential for any compromise? going into this, everybody realized the big areas of disagreement would be the

republican plan, mitch mcconnell's plan, saying that the virus loss -- lawsuit protection is something very important. want to maintain $600 per week in federal unemployment checks. it became clear after tuesday, with the treasury secretary and the white house advisor meeting with republican senators in the morning. they have to hammer out internal differences. with democrats in the afternoon. giving big agreement on more money to workers, small businesses, virus eight. the gop says one trillion max. the democrats say 3.5 trillion is needed. a deadlines drawing on keeping the virus protection in the bill. that will be a big sticking point. nancy pelosi said it was not a

good way to start the negotiations. staffite house chief of saying, democrats are drawing their own redline on the $600 jobless benefits. republicans want to cut them back to 200. 70% of their wages before the pandemic. a republican senator saying half of republicans will vote against the $1 trillion plan, throwing money at this is not going to solve it. there's one area where everybody agrees. nobody is in favor of president trump's idea to spend $1 billion to rebuild the fbi headquarters in washington. it's not only fiscal support we are talking about. also monetary report and the federal reserve. how dovish are you expecting the message to be?

kathleen: as dovish as they possibly can be. they will not change the key rate near zero. jay powell said at the june press conference, the fed is not even thinking about thinking about rates. he will repeat that again. on day one of the meeting, the fed showed it decided to extend the length of its emergency lending program. .e have a list of them especially the main street lending program. they have until the end of the year to run. there's two more lending programs that were not put on the list because they already run into the end of the year. thing, beingng worried about the dollar reserve currency status, it's getting a lot of play. it comes up every so often and financial markets. i think that is something that

the dovish fed could underscore. certainly, a liquidity they are providing is seen as one reason for the dollar being weak or. shery: a global economics and policy editor there. is losingtrump's support among senate republicans. why judicial would not have been his first choice. >> she's very popular in some circles. not so popular and others. courseto say, during the of history, the board of governors has had many people of many different stripes and perspectives on economics and microeconomics. , if you think she's a

great economist, that's fine. if you think that's not the case, my guess is that she will have little impact overall on the way policy is proceeding. the debate is not a bad thing. i tend to be a little bit more open-minded about the willingness of the institution to respond to these sorts of episodes. she would not have been my first pick. i'm not sure the consequences are terribly serious one way or another. >> the real business cycle theory is always a theater -- theory of shocks. you've been giving your shocks with a deficit. what will these trillion dollars of deficits do to our financial system? is there a certitude that we will see inflation? >> there's never a certitude

about anything in the future. i do think that we've had a very , dueus shock to the system to the shutdown and coronavirus. i think that the large deficits will have their own set of consequences. we were already in a situation was notscal policy sustainable. this will make matters even more challenging. i think there's a real problem. there's a real problem. problem is not just the fiscal policy but how the fed response to that fiscal policy and the pressures they will be under to engage in all budget fiscal policy and supporting fiscal policies in ways that may be detrimental for the economy as a whole. >> what would be the best way for the fed to execute a lessening of the balance sheet? >> there's a variety of views on that.

my preference would be letting them continue to run this off, stop increasing the balance sheet. they increase in a lot in the financial crisis. it never happened. it is 50% bigger than it was after the great crisis. i'm not sure where this is going. i think they need to declare their independence and regain control of monetary policy. the fiscal pressures they will be under. they don't make them like you guys anymore in the fomc. are we suffering from groupthink at the federal reserve? >> there's always a bit of that in any institution. i'm worried that there's not enough pushback on things. 2009 the back in problems that we will get into in qe and the dangers of a large

balance sheet and the risk of it being abused by the fiscal authorities. the difficulty we will face in getting out of it. nobody wanted to listen then. now, we are back in the same boat except it's bigger. the risks are greater. wisenk that it would be for the fed, particularly now, to be more articulate about what it looks like -- the exit plan looks like probably this. haidi: that was the former philadelphia fed president. one shop going in the wrong direction in tokyo. , horrible earnings misstep falling the most since october 1999. the lowest since then. we are off of the session lows of more than 12%. we are down close to 10% for canon after they had the second-quarter loss.

analysts had been expecting a ¥10 billion profit. plenty more to come on daybreak asia. this is bloomberg. ♪

♪ shery: malaysia's former prime minister will appeal after being sentenced to 12 years in jail over the first trial in the one empty scandal. he was found guilty on seven counts of corruption including $10 million that found its way into his personal account from the state fund. let's bring in dan moss for more context. -- important is the forget verdict and sentence? dan: very important. march, whenck to the government collapsed and he found himself back in government

through a separate coalition, there was a lot of concern that his legal process would be slow or would water down not be pursued with the same vigor. the fact he was convicted on all counts before the court towarday goes a long way assuaging those concerns. context,ut this in there are plenty of physics will say, the appeals process is a long way. he could get a pardon. aere he few people expected 7-0 result yesterday. this does mean that the appeal process will face an additional degree of scrutiny. ruling sure that the

yesterday is given its due. they: let's turn towards political landscape in malaysia. the prime minister leaves -- leads an unstable coalition. help ors judgment hinder his grip on power? thatit helps in the sense ck ofone more take -- ti the boxes that he needs to tick before he calls the early election. depending on how you count the majority, you can't count on passing a substantive legislation with a majority that fall. -- small. he needs a way to get more numbers. one way is through an election. yesterday's verdict does 1mdbalize, for now, the factor. shery: in the broader scheme of

wengs, this comes days after saw that $3.9 million settlement with goldman sachs. how does this help malaysia? they will be recouping some of those losses, right? parties --k all the the government and golden will be content to have that deal inked before the verdict. there's no question that malaysian politics and the legal mindsar will be on their as the parties were putting together that settlement agreement. just to reiterate the point i made at the start, it's easy for cynics, after the collapse of the government, to claim nothing changes in malaysia. a former prime minister being convicted is a massive change. shery: thank you very much for

that. will bep next, we talking about the record spike in covid-19 infections in hong kong. plenty more to come. this is bloomberg. ♪

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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: hong kong reports gdp numbers later today. protecting a fourth straight protraction. the fresh virus wave is worsening a disastrous outlook for the economy. yvonne man has the latest. really hard to see the light at the end of the tunnel, given everything that's been going on in hong kong. yvonne: that's right. it's in a deep recession. of they reported six last eight quarters and contraction. it's hard to see things getting better anytime soon. economists are expecting 8.2% drop from year ago in the second quarter.

that's only a slight improvement of an 8.9% decline in q1. june was a slight offset and we saw some activity pick up during the easing of lockdown restrictions. a lot has changed since then with social distancing rules getting tighter. the third wave adding to a list of woes that is weighing in the economy. the lingering impact from last year's protest. you have that effect from beijing's national security law. the government is reluctant to oppose of the lockdown. not only because of the economic devastation it could cause but also a potential humanitarian crisis. the average apartment runs around 500 firstly -- square feet in hong kong. it's not just the 1.4 million poor residents who were living in type living spaces. logistically, it would be difficult to enforce. shery: we are hearing that the

government may be considering postponing the legislative elections because of the virus. yvonne: calls have been going to delay the september vote for a while now. according to multiple reports, the government may announce the delay in early august. potentially, we could hear something in the next week or so. the government may actually congresso the china's to extend the terms for another year. chen says it looks more challenging to hold the election. he doesn't see september getting any better. they have to prepare for the worst, he says. made traditional campaigning very difficult. democrats have come out to criticize, saying that using the pandemic as an excuse to postpone the election is alive.

wants tohat china delay the election in order to avoid a potential defeat and because it would warn that the u.s. would oppose -- impose sanctions. half a billionr hong kong residents voted in opposition to the reelection. the delay may set the stage for more criticism, potentially protests. there are also legal challenges. the chief executive is allowed to delay the decision. a new election date must be chosen within two weeks of the original date. you cannot delay the election twice. there are hurdles ahead. don't miss out on our bloomberg tv special for more perspective on the social and

economic upheaval that continues in the city. that premieres friday. let's take a look at how markets are trading in this midweek session. a little bit direction us. -- directionless. investors weighing disappointing earnings, casting doubts over the strength of the consumer recovery. starbucks and mcdonald's missing the mark. rising virus cases continuing to build up globally. the nikkei 225, downside of 6/10 of 1%. on the kospi, upside at 7/10 of 1%. we could see some proper -- profit taking when it comes to korean socks -- stocks. encouraging signs when it comes to consumer growth being up for the third straight month. australia, upside of a quarter of 1% ahead of inflation numbers. we are expecting deflation to

come through later today. in new zealand, amidst a weaker kiwi dollar, we're seeing upside to trading. shery: let's get a quick check of some companies that have reported earnings in japan. nissan falling as much as 7% after forecasting a wider than expected annual loss. announced itpan will sell a stake of the business. we are seeing some challenges during this global pandemic. automation players are dropping the most in nearly four months on week orderly orders outside of china. can in shares are thinking the most in eight years. a fresh 21 year low after posting its first-ever quarterly loss. theychallenges -- challenges for japanese companies. nikkei seeing 2020 growth at around -4.5%. time when many

things are beyond our control, this startup is trying to give the world actionable intel on one of nations -- nature's biggest mysteries, the weather. we are speaking to the ceo and founder, next. this is bloomberg. ♪

♪ shery: you're watching daybreak

asia. let's get a quick check of the first word headlines. the federal reserve is extending most of its emergency lending program by three months through the rest of 2020. the program was designed to keep credit flowing to markets, businesses, and local governments during the coronavirus pandemic. the facilities have the potential to deploy trillions of dollars. only a fraction of that has been used. the fed releases its policy decision later wednesday. u.s. attorney general william barr has been defending himself before house democrats on capitol hill who say he abused his power and politicized the justice department to help president trump and his associates. it was the first time you had appeared before a committee in the democrat-controlled house since he became attorney general 17 months ago. malaysia's former prime minister will appeal after being sentenced to 12 years in jail over the first trial in the 1mdb be scan your.

he was found guilty on seven counts of corruption including $10 million that found its way into his personal account from the state funds. he was fined if you million dollars. the verdict came days after goldman sachs agreed to a $3.9 billion settlement with the malaysian government. korea's consumer confidence improved for a third straight month in july, offering another sign that it is past the worst of the pandemic. the consumer sentiment index rose this month. despite the improvement, the gauge has yet to reach pre-virus levels. haidi: this is monsoon season. it has caused severe flooding for countries across asia. china has been particularly hard hit. the damageest says

is not done yet. gives hyper accurate forecasts. we have the ceo and cofounder with us. great to have you with us. have beeneadlines dominated by everything pandemic related. we started off with bushfires in australia, wildfires in the u.s., flooding in china. the u.s. is bracing for hurricane season. in a situation like this, how is your company helping? shimon: yeah. great to be here. climate change is something that we cannot necessarily prevent at this point. it's a trend that is happening. one of the results is the volatility of weather. we are seeing such extreme events in australia and china. in every location around the globe, now. what we are doing is helping any organization better manage their weather-related challenges.

there trying to improve weather forecast by enabling our models across the entire world and trying to nail down the weather. the most important element is building whether intelligence platforms. while we can't really stop climate change necessarily, you can mitigate it and help prevent damage that it brings on us. shery: in order for your , youology to be effective partner with notable names. how much government assistance or cooperation, in terms of highly sensitive and secure telecommunications and wireless networks, do you require? shimon: not at all. is oure technology

weather technology stack. comprised on the modeling peas. proprietary data is not achievable by looking at publicly available data. running our own models in high resolution. we can improve the weather forecast significantly. key is part of our initiative, to be able to forecast globally. that is something we can provide from day one, from every place on the globe. obviously, the more data, the better. thatve other initiatives are supposed to help us over the next be years in terms of improving sensing in many places. haidi: tell us about your customers. we've seen many of those names being affected by the pandemic as well. what has demand been like? shimon: obviously, whether it impacting so many industries.

some of the industries we focused on were aviation. these are industries that have seen a decline in demand because of the business activity. we need to remember that it impacted almost everything. we are looking at the supply chains, from trucking, to shipping, to railways. on the on demand side of things, in india, the customer -- weather is more important than ever. in india, during the cyclone, we help one of our customers over there, a utility company. with our intelligence, they were able to understand exactly at what place and at what time to avoid outages. you can imagine what the consequences is -- of an outage during the lockdown could mean for the population. you can understand that the kind of businesses will see some

declining. the rest of the time, we will see mostly increasing demand for our services and solutions. haidi: where are you seeing the most growth in demand, regionally speaking? we continue to see changes because of climate change in different parts of the world. chain, supply infrastructure. that has a lot of assets across large job or fees, electricity's, lines, railways, retail locations. it doesn't matter. once you have a lot of access, you are exposed to weather risk. your people are exposed to that. every infrastructure related company is a potential customer. they need to come up with a plan to protect their assets, their people, to be proactive about it. many of the businesses are still

reactive. it's just incredible. how much has the pandemic affected your partnership than customers? i'm thinking of uber. shimon: yeah. some of the companies are big enough to withstand the storm. all of our airlines are operating still. we have not seen any customers leaving us. in terms of acquiring new customers, such as aviation, no doubt it is slow. we are trying to help customers by coming up with innovative business models. in other verticals, we are seeing an increase in the demand, specifically on the supply chain. manufacturing, trucking, shipping, railways. these are areas where we are seeing increases.

verticals, we are seeing some slowdown. it's not a decrease in the demand. it's more of a general slowdown because businesses slowing down. q3 arethat q2 and actually better than what we expected. shery: it was great having you want. thank you so much for that. climacell ceo and cofounder joining us from boston. let's get a quick check of the latest business flash headlines. starbucks is rising in late trade. sales fell- global 40% with revenue beating estimates at $4.2 billion. starbucks expects full-year sales to be down by as much as 17% in 2020. that makes it one of the first restaurant companies to offer full-year guidance.

mcdonald's is to scale back its business in japan and speed closures in the u.s. after reporting its worst global sales declined in recent memory. same-store sales fell 24%. international markets fell by a whopping 21% -- 41%. drive-through and delivery wasn't enough to make up for the pandemic shutdown. they plan to close 200 u.s. stores this year. harley davidson has posted its fourth-quarter -- first quarterly loss in more than a decade. their restructuring plan undermined by the pandemic. sales in the u.s. have been in a five-year slump and the new ceo, who took over in february, has embarked on a cost-cutting spree, shedding 14% of the workforce. shares fell by 11% before recovering by the end of the session. giants, the biggest tech had to capitol hill to face a

tough congressional antitrust hearing. their critics are lining up. the ceo is the latest to slam the likes of google and apple. this is bloomberg. ♪

♪ this is the first major antitrust investigation that the congress of the united states has engaged in and about 50 years. addresssigned to economic coercion. to the extent that these large technology platforms are behaving like monopolies. >> the antitrust issues facing facebook and amazon are different than those facing apple. >> zuckerberg will get the majority of the iron. bezos will get the majority of the praise. i think cook will stay out of the way. >> google is the only actual monopoly. when you have monopoly power, you have to have regulation. in the next couple years, we will probably get closer to it than we've ever been.

>> sometimes, i have negative opinions about apple being control over you. i thought about this one. this one is going on right now with antitrust. this one.les side on fourth to pay a ransom of 30% or they are denied access to that marketplace. this is 30%. this is highway robbery. >> look at what happened in the android world. i don't object to the 30% at all. >> i can't think of an under industry -- another industry where one company has 93% share. google benefits from the fact that it's not an easy business to understand. i would expect that they will largely stayed away from the train wreck and praise that will be the show.

lawmakers and tech leaders expected to appear on capitol hill later today. the target is growing ahead of a tough grilling from lawmakers. the maker of fortnite is the latest to slam apple and google, saying the duopoly they hold over mobile app stores and there threaten the survival of smaller companies. tim sweeney told us his firm is struggling to compete in markets like china. not aaking up is justifiable solution as long as there are better remedies. all we need are companies to change their practices to unleash the united states economy to fully compete. epic can't compete internationally as strongly as we could of apple and google were to unbundle these services

and enable stores to compete. if you are looking for an solution, yuan surgical changes to these companies and their policies which open them up. decide they will turn over a new leaf and do the same thing. you need government regulation for antitrust enforcement of existing laws to solve the problem. strongerill come out if these services are allowed to meet with each other. american companies will invest in businesses that don't exist yet. fortnite and minecraft and , newsoft services categories of apps that are not allowed to exist under apple's current regime would take off. you would see this company leading the way again. >> what do you make of the competition that chinese tech companies are posing to the u.s.

technology industry? >> to the extent they are complying with laws, not misusing the power they might have to serve will users, we should welcome competition from everywhere in the world. european tech companies, chinese tech companies. look at the china software economy. very interesting. here in the u.s., app stores are the dominant way of discovering and installing software. chatina and korea, applications are the dominant way to install software. bettercure ration works in a lot of cases. on android, there are dozens of competing stores which eased -- each have their own terms and offerings competing to ensure that there a robust economy. there's a lot of interesting lessons to learn there. >> tiktok has been scrutinized

because of its chinese ownership. you have u.s. companies banning it. the president is suggesting it could be banned at a time when u.s. china tensions are at an all-time high. , given you make of that the stakes at tencent owns in your company? >> tencent is an investor. that doesn't change my opinion on anything. havereally important to due process involved in these decisions. if tiktok were found be doing something wrong, they should be punished for that. i don't think it's right to assume that consumers should be denied access to this over the fear of something wrong happening. you need a higher standard than that. you need to process. -- due process. if we were making arbitrary decisions to throw up confident are, you are no better than china with its own form of protectionism. china denies facebook access to

china. you deny google. you allow a few things. we've been asking for permission to release fortnite in china for three years. we've been denied. we should be pushing for a level playing field between companies that countries. we should not be reverting to, china doesn't, so we should do it too. haidi: tim sweeney there. before we hand over to bloomberg markets china open, is a quick check of how markets are trading at the moment. ,he neck a at a two-week low falling 6/10 of 1%. industrials and materials leaving the declines. we have seen significant strength for the japanese yen, which is holding 105 level. the kospi gaining attempts of 1%. -- 8/10 of 1%. stocks alsoand kiwi gaining ground. up, xi jinping

says the asia infrastructure investment bank should be the model for multilateralism. we have an interview with the president, next. bloomberg. ♪ -- this is bloomberg. ♪

>> it is not :00 a.m. in beijing and shanghai. i'm tom keene. >> and i'm david ingles. we are counting down to the opening of trade. let's get to your top stories. shares across the region trading mixed as investors await the fed. the fomc is seen staying dovish for longer. tom: goldman