perhaps, isrning, by executive order on hong kong. china will sanction senators rubio and cruz on taiwan, taipei, because beijing, the cabinet offers or makes the first visit in over 40 years. beijing says a candid dialogue is necessary. there are trump executive orders, some suggesting they are incomplete. perhaps executive orders will help in istanbul. the lira depreciates against any and all.

bloomberg surveillance. i'm tom keene in new york. guy johnson in for francine lacqua in london. monthsin to the summer in august. i look at the newspapers in the united kingdom and it is sort of a soup of distractions right now. inme and update on the virus the united kingdom, because the statistics i look at are actually pretty good. guy:. they are pretty good, tom, and there are large parts of the country where people are talking about the fact that we may have achieved herd immunity. you listen to the commentary come out of a large hospital, -- out of large hospitals, they are seeing a fraction of the number of cases they saw coming through the door back in the spring. the situation seems to be under control. this is pumping boris johnson the prime minister, to make firm assertions that schools will september, in the same way governor cuomo is

making those assertions in new york. thathe is pretty lonely on right now. that will be one of our themes without question in august. back to school on order. but will they be back to school? here is ritika gupta. ritika: in hong kong, it is the highest profile case yet against democracy activists under that new national security law. police have arrested media tycoon jimmy lai and raided the offices of his flagship newspaper. he is accused of colluding with a foreign country to endanger national security. meanwhile, china is retaliating for the u.s. decision to sanction 11 chinese officials over the crackdown in hong kong. beijing says it will sanction 11 americans. another move by the u.s. is likely to stem tensions with china, the most senior visit by any u.s. official to taiwan in more than four decades. health and human services theetary alex azar raised taiwanese president's response

to the pandemic, calling democracy and inspiration to the region of the world. some u.s. governors are pushing back again as president trump's exec at of action on added unemployment benefits. offer $400n order to a week in supplemental pay. the catch states -- the catch, states have to kick in more than 25%. andrew cuomo says president's order is based on shaky ground legally, plus he says it is impossible for the states to pay. bill gates says it is "mind blowing" the u.s. has not improved its coronavirus testing. the microsoft cofounder told cnn the process is slow and lacks fair access. gates says you cannot get the government to improve testing because it wants to say how great it is. gates and his wife have donated $350 million toward coronavirus research. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries, i'm ritika gupta. this is bloomberg.

tom? guy? tom: thank you so much. equities, bonds, currencies, commodities. it is a turn market. this is what you always see on a monday at -- h schoen market. this is what you always see on a monday. what we really look for is a yield structure moving higher off of what was his see -- what was seen as a pretty good jobs report. we will reset that monday and tuesday as well. i would know that the turkish lira, let's recall on friday, mr. erdogan spoke, and lira strengthened nicely off that. what you need to know is it has given up with a vengeance all of the improvement off the erdogan comments on friday. ,eally now it is 7.40 threatening further weakness. guy: -- guy, what do you see this morning? guy: european equities fading after the numbers were

announced. we are now back to flat, trading on very light volume as you have pointed out with the august volume very light last week. that has continued into this week. we are seeing some leadership come from the energy sector. opec out with a key report. it could be a busy week for the energy sector. euro-dollar continuing to fade. it has continued into this morning. -- 1.1771. copper had a very bad friday. it bounced back a little bit. tom: i saw this in the blur of the weekend. dr. copper, and there is an improvement off of march and april. what an ugly two days for copper. guy: it does stand in some way kind of antagonistic lead to

where we are in the rest of the market. ," we can rip up the script and go to our -- tom: we can rip up the script and go to our guest. we will touch on turkey and so valentin, i'm going to rip up the script on copper and go to the australian dollar, which is essentially a commodity proxy with that trade with china. what has australian dollar done recently. valentin: the australian dollar has been falling at currencies higher against the dollar. we are surprised by the resilience of that particular currency, especially given the return of covid in the state of victoria, and indeed the overall economic outlook for the economy. that said, it seems that where

the domestic economy, they continue to struggle, locked on measures had to be reintroduced. the global environment, commodity prices, metal in particular, feel quite supportive. we should also mention that the resilience there, despite the there was a geopolitical conflict between the u.s. and china, but china ended up engaged into a confrontation. a trade confrontation. resilience for the australian dollar seems to persist. some of those supports are starting to fade. thendeed investors reassess economic outlook in australia. but also some of the industrial metals are moving and could be one of the first victims. to gete reason i wanted

you on to start off strong was to reset on our dollar thinking. it is incredibly range bound. kit juckes at socgen talks about a narrow market as well. at credit agricole, can you form a dollar call that has movement to it, or is it just stasis on the dollar? moment -- at -- i guess investors are awaiting more news or indeed further development to make up their minds. our own view is that we cannot exclude further rage trading in the near term. the outlook for the dollar should not be approved anytime soon. in particular, we worry that the pandemic, the covid-19 pandemic will only start showing the economic impact in the coming

months, and this could be more proactive as soon as september, and topping it all, we do think that the political risks associated with essential elections are not in the price. we therefore think that the dollar trajectory could be lower, especially the gains in the majors with the likes of the euro and the japanese yen. morning.ntin, good let's talk about what is happening with the stimulus package, or lack of stimulus package. the president has to deliver executive orders to keep the show on the road. that will take us close to the election you just said was underpriced. we are therefore likely to see debate and disagreement as we approach november on the stimulus, but will be required for the u.s. economy, an economy that you say as well has not been affected by covid-19.

how toxic will that be for the dollar going into november. there is more risk in development which is continuing to cloud for the dollar. the lack of agreement in , thengton, in full view negative impact of the pandemic could be damaging for the dollar. it highlights what a dysfunctional washington may look like. the tension after the november elections in particular. --sident trump is to be real if president trump is to be reelected but democrats regain control over the congress. or if there is a new president in the white house but republicans have maintained control of the senate. the economic telephony is quite troubling. calamity ismic

quite troubling. there could be a potentially damaging development. and i have to say, for the markets to really respond, and for the investors to make up their minds on the dollar, the u.s. economic data should also start showing the negative impact on the return of the pandemic, which so far is not the case. tom: thank you so much, particularly those early comments on australia. in august, and maybe there is a little bit of sluggishness, but there is lots going on, particularly in politics, in international relations. to start theer 6:00 hour off. and then mark tarter -- mike darda.

this is bloomberg. good morning. ♪

tom: good morning, everyone. "bloomberg surveillance." guy johnson in london, tom keene in new york. futures up seven, dell futures up 120. -- dow futures up 120. there are the economic systems of this world, and blackrock elgatment institute, bartsch synthesizes together a more holistic view. thus to begin the three hour

conversation. i'm kidding. we have her here for a number of minutes this morning. there is so much to talk about in this summer, this august, of a really strange 2020. how does europe come out of this? when we come out of this pandemic, when we come out of the generational change of leadership signaled by chancellor merkel, where will europe be on the other side of this bridge? tom. good morning, i think europe at the moment in somewhat better shape than in other parts of the world. it has a better control of the virus dynamic. response also seems to come together more than in other places, and there is more visibility about the fiscal availablehat has been

. that looks fine, and then if you look at the number of long-term trends that will be accelerated pandemic,k of the notably a clear shift toward , addressingty things such as inequality, i think there is reason to argue that europe essentially is in a decent position. to benefit from these trends. tom: is it a decent position of actual improved labor productivity, or is it an overlay of maybe good policy like europe? can europe jumpstart labor productivity over the next five years? elga: in terms of the

productivity trends in europe, it is important to understand the labor productivity trends that we had over the last couple of decades, or i would say 1.5 decades, maybe two, was on the back of europe's finally getting down its structural unemployment rates. and bringing back into work a lot of what was previously priced out of the markets, and that together with the rise of caused formployment the visible slowdown a level of productivity. europe stillrward, suffers from the fact that it has a lower long-term growth potential than other parts of the world. through various emerging markets but also relative to the u.s. it still needs to do more work on some of the structural issues.

the united states and china are headed for cold war 2.0. it looks increasingly like that day after day. europe is going to have to take sides, yet europe has much bigger exposure to china than the united states does from an economic dependency point of view. when europe has to pick sides, how big of a hit would be to the european economy? not 100%sonally, i am sure that europe will proactively pick a side. i think it might try to chart its own course. but that will be challenging. but i think from a political point of view, europe is standing on its own two feet. i think politically, economically, it might be the best way to balance out this

particular position, which we think is here to stay. the decoupling company globalization, it has profound implications for how you actually need to structure your investment. guy: nevertheless, even if europe tries to go a certain way, the economic landscape is going to change. the blues asian appears to be in whatse, and it appeared -- does that mean for europe, the kind of countries that feed in the tech engineering into chinese economy? do they seem to be able to do that, even if it is a 5%, 10% drop, what does that mean? clearly europe is more open as an economy, as an economic region and say the united states. intertwinedeeply with the value change as well,

so it will be affected. of could argue that a lot companies are reviewing the supply chain and they will also, as they are changing, how they produce, where they produce. they will at least initially have higher demand for capital goods because they are supply chains.ir so i don't think it is presetrily, you know, that capital goods producers woulds germany or sweden immediately suffer from this. guy: we are going to leave it there. thank you very much indeed. we appreciate your time, giving us a sense of what is going on from a macro perspective. elga bartsch. bloomberg,n bloomberg markets with alix steel and myself later on, we

will be looking at market risk. as gold continues to push on. york, 3:30in new p.m. in london. this is bloomberg. ♪

ritika: let's get the bloomberg business flash. saudi arabia's state run oil

giant plans to pay $75 billion in dividends despite a profit 73% drop ina earnings for the second quarter. the company expect its performance and demand for energy will improve over the rest of the year. most of aramco's payout will go to the saudi government, jones 98% of its stock. warren buffett is gambling on better days for berkshire hathaway. spent 1.5haway billion dollars buying back its own stock in the second quarter, and that higher pace may have kept going in july. bircher posted a 10% drop in operating profit, -- berkshire posted a 10% drop in operating profit, slower than some analysts predicted. priceing to reuters, the of close to $5.5 billion is said to be competing with private equity firms. it is a software company focused -- rober is ar

software company. that is your bloomberg business flash. guy: thank you very much indeed. european stocks beginning to make positive moves. we are off very light volume, though. -46.45%,ndon market, the average daily volume of the left 100 days. it is august. tom: it is august, no question about it. a lift to the market. spx up seven on futures. turkish lira, 7.33. keeping us inform. this is bloomberg. ♪

guy: guy johnson in london, tom keene in new york. tom, let's talk about what is

happening in china, bloomberg learning china will sanction top u.s. officials in retaliation over hong kong, the tensions between the two nations wrapping up further. friday, on sanctions chinese officials including carrie lam, this over their role in imposing the security law. yan, chiefnow, jinny turn economist. i am trying to work out at the moment if this is symbolic or if it will have any real meaningful economic impact. what is going on, the tit for tat in terms of sanctioning officials. >> i think we have been warned that retaliation is coming, and in the wider periods in the u.s. and europe, market noise will have an impact on the market. china data is still coming up pretty strong, and recent data suggests the fundamentals of

china's economic growth will still continue to boost recovery momentum in china. do you think the financial markets are taking this quite well? i look at what is happening with dollar and i see it with a 6.9 handle. in some ways, given the magnitude of some of the commentary i am reading, talking about a cold war two .0, i'm surprised the currency continues to do what it does. but i guess the data that you're talking about could be partly the reason behind that. jinny: the strong data is one factor. the other factor is that we have seen all of this before. we have seen it for a year now really come and that is kind of talkingfor tat with about we have been warned of it. the markets are becoming -- the pricing in all of that noise in the coming months. we know that up until the

elections, we will see that ratcheting up of tensions between the two sides. tom: good morning. it is wonderful to have you on. what is your estimate? nny being withi standard charter and now with i sbc. will we see a lessening of import and export dynamics with china? we see the political action, but will it be a diminution in trade? jinny: data shows that the chinese imports of manufactured goods from the u.s. is starting to recover. that said, we need a lot more agricultural and energy goods to make up that shortage in that gap. it is going to be a beach challenge to make of the pandemic situation having an

impact on global trade. going forward, there will be recoveries, but will it be enough to satisfy the amount necessary to satisfy that phase one trade deal? that is a big challenge. tom: a delicate question, and i am going to ask it. i don't think i would if you were in beijing. but do you triangulate beijing, hong kong, and taipei? when you discussed economics and when you discuss the international relations of all that is going on in this august of 2020, how do you position those three geographies? a very interesting question, and from an economic and market perspective, we have to remember there are a lot of taiwan and hong kong based investors are also invested in china's market. opening up of china's bond markets, equity markets, and a

lot of the time one based investors are really looking for to trade, particularly with u.s. treasuries and yields being so low. the chinese domestic on's, sovereign bonds are becoming more attractive. they are probably from -- the chinese domestic bonds, sovereign bonds are becoming more attractive. yields that it is most important to investors. there be any economic impact if the united states than we chat and -- if the united and tiktok?wechat jinny: that might be something that is a concern. i believe the key here is whether this kind of rise in tech giants in china can be slowed or can be replaced. it might be able

to be sanctioned. however, the unicorns in turn are really started to overtake a never of unicorns in the rest of the world, and that is difficult to slow down. hitsise of china -- it china as a tech power and an economic power, and the domestic consumption picture is very what theeaning that global organizations are looking to is to capture that domestic chinese consumer market. producer,s not only a it is also an important consumer of most tech goods globally as well. jumping around a little bit, but i just want to get you -- tom: it's ok, i am, too. guy: people have been scratching their head, trying to understand why the pound has been as strong as it has been. i heard one theory that suggests

hong kong money is flooding into london at the moment to seek a safe haven. do you think we are likely to see some of that happening? do you think there is a kind of haven status that is being attached to the u.k. right now on some of those flows -- and some of those flows are backing that up? jinny: being based here in london and also in the u.k. national, i have to say any open economy come as london is obviously one of the key financial sectors globally, will welcome -- some of the other hong kong,es, it singapore, to any of those international cities with some , withf reputation transparency, with institutions in place, will start to see those inflows and capital, and that will continue. i see the strength of the pound supported by fundamentals. we are not seeing the recovery

yet. it is supported by is a historical institution that capital will continue to flow into those global cities. tom: thank you so much for being with us. with icbc standard bank of china. right now with first word news in new york city come here is ritika gupta. ritika: thanks, tom. the struggling u.s. economy will get only limited help from president trump's latest executive orders, but that may persuade lawmakers to get back to the negotiating table. the president redirected disaster relief fund, saying the government could provide $300 a week to the unemployed, plus $100 in state aid. that is down from the weekly $600 that expired in july. that money could run out in one to two months. a new poll shows joe biden leading president trump in two states, andound according to the cbs new poll,

up in six biden is states. the president's handling of the coronavirus is said to be a major issue. another coronavirus matter for the u.s., the country is now past 5 million infections, adding a million new cases in a little more than two weeks. meanwhile, the positive test rate in texas hit another record. in cases and deaths floated florida and arizona. the father-son team accused of helping carlos ghosn escape from tokyo are in jail. the federal judge in massachusetts ruled that michael taylor and his son, peter, cannot be released while another judge determines if they are available for extradition. global news 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more i'm ritikauntries, gupta. this is bloomberg.

tom? guy? thank you very much indeed. coming up in the next hour, franklin raines, formerly of fannie mae. york, 11:30 am in london. this is bloomberg. ♪

tom: good morning, everyone. "bloomberg surveillance." thank you for being with us on a monday. as guy mentioned brilliantly, the volume really low. even with the virus, everybody clears out in london in august, right? jinny: everybody -- guy: everybody clears out in

europe, tom. it is 100 degrees outside certainly today and tomorrow, but it gets a little thundery later in the week. at least we have power over here. generally august, very light volume. last week was light volume, this week is light volume. i'm fascinated to see what the story is in terms of the return to work in september. tom: very impressed, folks. guy johnson confirming to fahrenheit, something francine lacqua is usually unable to do. right now we will go to hong kong. we could spend the entire show, frankly, on hong kong. editor,a government karen leigh. i want to go to the tea leaves out there, and it is always true in america, the symbolism of the fly. the south china morning post has a smaller article today, where beijing is really beginning to

shape up the laws on desecration of the flag. to me that is a little tea leaf of the tension in hong kong over 1949 is flag from displayed or shown or trashed upon in protest. what is the tension that you see and the symbolism of something, like how the beijing flag is treated in hong kong? karen: well, tom, as we have been following this, as we have been following over the last six weeks or so, it has been an escalating drumbeat of tensions between china and hong kong, and the vibe here is very different than it was two months ago. we saw things today, a top media tycoon being arrested, of 200 or so police officers storming the officers of the pro-democracy newspaper here, which he owns. these are things we would not have imagined in hong kong even a year ago before the protests. i think for a lot of people,

this is a confirmation of some of the fears that have been circulating since that national security law came down at the end of june, that it was something china would use to curtail freedoms here, basic freedoms like being able to wave the flag you want, freedom of the press, being able to protest, and all that leads into this narrative here, concerns .bout hong kong's future it all mean going forward, karen? with jimmy lai being arrested, and the futures -- the shares in his country -- the shares in his theany being down sharply, two systems, one country is gone. if you look at the u.k. and what is happening here, do we effectively have no independent media left in hong kong? troubling,s really

and a lot of people are more afraid than they have been in the past in hong kong. it is unthinkable with the foreign correspondents here, with everything going on today. for the u.s. especially, there is this question of autonomy from the main -- from the two countries. the trump administration way in terms of criticizing what has gone on here over the last couple of months, condemning china over the security law and also cracking down on media and pro-democracy activists in hong kong. all of this is coming days after trump moved to wechat in -- moved to band wechat and tiktok. this would be one of the biggest things we have seen in a long time. i think for a lot of people, the drumbeat of tensions, with tensions -- with things seeming to go faster and faster in the

last couple of hours, we have seen china moving to sanction 11 americans, including senators cruz and rubio. people are saying, what are we going to see next? it is so hard to keep up. tom: what does sanctions actually mean? i look at this across the internet, and these are not economic sanctions. int is a diplomatic sanction this regard to these 11 americans? specify, andidn't to a lot of people this is largely symbolic of a gesture, as they have been in the past. they also said that they would american entities .n december so i think for a lot of people this is a symbolic move. where it could be really important is in what it spurs

the u.s. to do come in how he keeps this drumbeat of tensions rising. tom: thank you so much. too short a visit today. karen leigh, leadership a government editor in hong kong as well. we have a not looked at the thes, the case dynamics, death dynamics, the sick 66 in trend. i did a shout out on twitter this week and, what new york state and new york city have accomplished is absolutely extraordinary when you look at the map. we will get an update from joshua sharfstein of johns hopkins university. we do that in the next hour. at turkish lira churning 7.33 in depreciation. this is bloomberg. ♪

ritika: this is bloomberg surveillance. i'm ritika gupta. job cuts in the u.s., oil picked up last month and the outlook makes it worse. one to 9300 people in in the oil sector lost their jobs in july. that is a 43% increase from

june. that is almost 100,000 job cuts in the industry since the coronavirus pandemic began. trade group forecast a lot of cutbacks because the virus is sparking economic activity. the property group reportedly has an idea on what to do with empty space once occupied by -- such as sears and jcpenney. according to dow jones, those could be into -- turned into amazon fulfillment centers. amazon is also an talks about putting his coming grocery store chains in penny locations. india's alliance industry is now the fourth richest person in the world. surging past the wealthiest -- he has increased his fortune by $22 billion this year to more than $18 billion. shares of allianz have doubled since march. that is the bloomberg business flash.

thank you very much indeed. how do you manage risk when interest rates are effectively zero. let's focus on that now. bridgewater associates co. cio bob prince has the high-grade corporate debt have traditionally been a place to hold well, the extreme low interest rate brought on by the covid-19 pandemic has upended their role. he spoke to bloomberg's jonathan ferro. bob: while everybody sort of focuses on the change in payroll and people tend to focus on the growth rate, the big issue is the depressed level of spending and income in the economy, which is reflected in the level of the unemployment rate of around 10%. the longer that we are in that situation of a depressed level of income and spending, the more vulnerable individuals and companies are to that set of circumstances. the most likely time frames that the virus impact on income and

spending is 18 to 24 months. something like that. it is very uncertain. as you can imagine, we have just had a four-month fiscal program, or one quarter. imagine having to do that a second quarter, third quarter, fourth quarter, 6, 7, eight quarters. imagine having to do that for eight quarters in a row to make up for the low level of income and spending in the economy. imagine the potential on the dollar, the potential on inflation, and the effects on other assets. i thinkthat lingers on, you have a combination of economic destruction with liquidity expansion. john: good morning. -- rates, for the foreseeable future, it makes the economy and how we see portfolios as well. can you speak to that? bob: it is sort of a mind blowing thing that essentially beget a zero interest rate on

the treasury bond, and that means there is no interest rate. if there is no interest rate, there is no discount rate of cash flows. so how long is the duration of cash flows and what the present value of cash flow is if they have no risk -- no discount rate or risk premium? there are a number of implications for bonds in the traditional 60/40 portfolio. from a bond perspective, you have virtually is zero return. you have an asymmetric return because there is no symmetric limit on how the modular goes up. even if you go to flat zero, your -- on how the bond yield goes up. you could lose 20% or 30% if you have a normalization of real yields or a rising inflation. you have an asymmetry in the bond market, and you're not getting paid any returns. i think what people are not registering is how that impacts the equity market? there are three impacts of zero interest rates on the equity market. first of all, you have taken away the floor on equities

decline. typically if you get an equity decline and an economic decline, earnings are following -- are falling. if you cannot lower the discount rate on those earnings, the downside is bigger. the second thing is, if you cannot cut interest rates, then you cannot put a floor under the economy except through monetization of fiscal policy that we are doing, which then threatens the currency. the third impact it has on a portfolio is that if the equities are falling, normally you would get the bond rally to diversify that risk away, but that doesn't exist now. you're sort of holding the equity side of it with not much downside protection, and you're holding the bond side of it with an asymmetric return pattern and zero yield. it is a very problematic scenario for any sort of traditional investment strategy. the jon ferro, continuing discussion with bob prince of bridgewater.

davos, oneresting in the dimon them -- on the dynamics we are seeing with the zero balance. january seems so long ago. guy johnson mentioning the volume, the turf of volume that we are seeing in london. futures up six, dow futures up 1.08. nasdaq futures are flat, i'm going to call it this money. he decided turn to the market -- a decided churn to the market. brent crude out just $45 a barrel. in our next hour, must-listen, must-watch. michael darda, m km partners. this is bloomberg. good morning. ♪ what happens when a wireless carrier

puts its customers in charge? well, the good news gets shared. and it gets rated #1 for customer satisfaction. but don't just take our word for it.

take theirs. it's your wireless. your rules. only with xfinity mobile. call, click or visit a store today. tom: this morning, perhaps it is

by executive order on hong kong. china will sanction senators rubio and cruz, and i know this -- all -- on taiwan, type u.s. cabinet officer makes a first visit in 40 years. beijing says a candid dialogue is necessary. there are four trumpian executive orders -- count them -- some suggest they are incomplete or legally questionable. dr. navarro says they were incurred by the lord and founding fathers. perhaps executive orders will help in istanbul, the lira depreciating against any and all. good morning, everyone. "bloomberg surveillance." guy johnson in for francine lacqua and london, and i'm tom keene in new york. it is a most interesting, odd august. in the heat, guy, and london -- is it like normal summer heat or light global warming?