haidi: good morning we are counting down to asia's major market open. shery: welcome to "bloomberg daybreak: asia." companies challenging washington. to sue wechat users operating in china.

the recovery is under threat from the covid-19 resurgence. frydenberg says the other plumbing rate will jump in the coming weeks. economy and the government handling of covid-19. a look at howake we are shaping up for a new trading week in asia as the market continues to search for direction. u.s. stocks trading close to fresh highs. we had the stock market up for a fourth straight week friday amid albeit light volumes. up .2% this morning and asia and we are seeing positivity going into the start of trading in japan. we have one report prime minister shinzo abe is headed back to the hospital so we will continue to watch that story.

and the potential applications for policy continuity. japanese yen holding steady at 105.86, with a rebound in the friday session. rise in u.s. treasuries. at $42. crude trading 49, ending the last week its advancering in asia. shery: let's talk about china. beijing is offering support to strengthen hong kong's role as an international financial center. for more on this plus the latest on u.s. china tensions we are joined by our chief north asia china correspondent, stephen engle. what is vision promising now? -- what is beijing promising now? >> it is no surprise beijing will come out and say it will support hong kong as an

international finance center. but it points to the issue that has crept up, since the national security law was imposed on hong kong. and since the tit-for-tat retaliatory sanctions against hong kong officials, and chinese officials. it points to the fears perhaps that have risen in the financial community here that they have to walk a tightrope between competing regulatory systems as well as sanctions, when you have an international bank with a global footprint you have to comply with the national security law as well as the u.s. sanctions. we are hearing on the statement from the banking regulator, cbirc, from beijing saying it will provide support for its financial institutions in hong kong, and offer services to residents and companies. let me read your part of the cbirc statement. at present, hong kong's financial market is generally operating smoothly and the link exchange rate system, also known

as the dollar peg, has eight solid foundation, which also reflects the confidence of the inner market in hong kong. hong kong's status as an international stat financial weekend andot be shaken, weakened and but it will become more prosperous in the future." we will have to see how that shakes out with what some say is the vaguely written national security law. here,re on tenterhooks beijing saying it is going to be fine. the may be hearing lawsuits in the united states. onempts to thwart plans tiktok and we chat. what we know? >> let's talk about them separately. bytedance, the owner of tiktok, plans to file a lawsuit against the trumpet administration

monday in the united states and we are not sure which jurisdiction or court they will file the lawsuit. they are going to county executive order banning transactions with the chinese video app in the united states. in a statement said it strongly disagrees with concerns raised by the trump administration, who on august 6 ordered a ban on the app in the united states within 45 days. later give a 90 day order to have bytedance i best -- divest its tiktok interest in the united states and sell it to an american buyer. we know microsoft has publicly acknowledged it is interested. we hear from others that oracle and twitter may be interested as well. in the tiktok statement saying there was no due process, ahead of that executive order. on we chat, potentially more sensitive issue for businesses. there hearing privately, trump administration is trying to assuage fears of u.s. companies like apple, who fear a

ban on wechat, if it is a blanket ban reaching all the way to china, that would do serious harm to american businesses trying to still conduct business across the pacific. nevertheless, a group of wechat users asked a federal judge to block the trump ban on what they say appears to be all users of wechat in the united states on national security concerns. the complaint was filed in federal court by the u.s. wechat users alliance, a group of chinese market lawyers. date -- chinese-american lawyers. they claim the ban is unconstitutional. to ourthank you correspondent as the plot continues to thicken. shery: coming up ahead, more on the s-china relationship. >> next week ahead in asian economies and oxford economics

economist joins us warning there is still a long way to go for the recovery. this is bloomberg. ♪

>> global coronavirus cases have topped 23 million, with worldwide deaths above 800,000. virus related fatalities rose by 998, the first time in five days the total came in under 1000. california reported its highest number of new infections in one week and france reported its largest increase since mid april. greece and mexico report surging numbers. india topping 3 million infections as the outbreak accelerates, you cases increased 57,00000 sunday with deaths total. . south korea's considering tighter health restrictions amid warnings the country is facing a

massive nationwide resurgence. australia once a post-virus recovery is under threat from state border closures as health services fight a cover 19 resurgence. treasurer josh frydenberg says 700,000 have regained work after being furloughed but australia's on appointment rate will exceed 13% in the coming months, almost half a million jobs will be lost month and in october. goldman sachs says one quarter of furloughed workers will not return, despite the gradual u.s. recovery. in the early months of the pandemic employers shed 22 million jobs. most were billed as temporary, with state real brings -- state reopening's bringing people back to work. goldman sachs cyst when he 5% of temporary layoffs will become permanent. global news 24 hours a day on air and at quicktake by bloomberg. on air and on quicktake by bloomberg. -- powered by more than 2700 journalists and analysts in more than 120

countries. i am karina mitchell. shery: for more on the jobs outlook and economic news we are watching, let's bring in our guest from oxford economics. weather in australia or here in the united states, what factors determine whether or not job losses we have seen are temporary or become permanent? seeing, over the last few months, and initial spurt of economies have opened up in jobs of come back. we are now moving into the second phase of the recovery which is the longer, slower, where,fficult phase, because of the size of the shock to household incomes and appearing back of some government support, across most

countries over the next few months, we are going to see lower levels of demand in the economy. that will support fewer jobs. if you layer on top of that the fact that we still have not fully remove restrictions, and australia, a lot of travel restrictions remain in place, you mentioned and that will be challenging for the hospitality and travel sector. in other parts of the world restrictions in place, the arts and entertainment sectors. concerts and theater so those jobs cannot really come back. the longer it goes on the more it becomes entrenched. thes a sign that globally, second phase of recovery is going to take much longer, and be much lower. the jobs, therefore, the growth is going to come down. >> how effective have these support measures, fiscal or monetary, really filter through the global economy so far? effective inbeen

supporting incomes, and supporting people on a day-to-day basis. but in supporting employment as well, i think that keeping in mind without the support measures, the economic damage that has been done would be much worse that what we have seen. the job losses have been very and we can see them clearly, but they have been smaller than they would otherwise have been. if you think back to march and april when we really were shutting down large portions of the global economy forcibly and quickly. if that had just been allowed to play through in terms of redundancies and no support from government for household, then the impact on commute tumor spending would have been more pronounced. -- the impact on consumer spending would have been more pronounced. and would have generated more indirect job losses as a result

of the shortfall in demand. so they habit effective and needed. but that does not get away from the size of the shocks the pandemic has skated for the global economy. now the job is to rebel from that. there's no getting away from that once became clear the policies put into place to stem the flow of the disease, what that would mean for our activity levels. we are getting into a week where level central bankers will meet at jackson hole. we talk about this idea of, what does the central banker communicate at this point where we are, by and large, past peak monetary policy and central banking? what kind of a new reality are we facing what we have nations engulfed in debt on the other cited this, and central banks -- on the others of this and central banks running out of firepower. at the risk of the economy falling off a cliff if the fiscal side gets withdrawn? >> i think we are likely to see

out of the annual jackson hole, virtual and not a person of course meeting, from central-bank globally, we are likely to see signaling from particularly that federal reserve, around explicit forward guidance for monetary policy. really trying to achieve two things. one, signaling monetary conditions are going to be very supportive, as you mentioned they are. they will remain that way for some time, so people can be confident they are not going to face interest rate rises or tighter borrowing rates in the near term. they are also going to be looking to signaled that they are committed to getting toward the target ranges central banks have for developed economies around 2% to 3%. guidance would be an absolute commitment to those.

we are also likely to see and we have heard it many times from central banks, and are likely to hear it again, in the current environment what early matters and can help is fiscal policy, stimulatory policy. we have obviously had the emergency measures put into place. what is going to be needed from governments as we move through the pandemic and into the recovery phase, is more traditional fiscal policy. infrastructure investment, and other ways of, getting spending into the economy getting jobs growth going again, and that will ultimately drive the recovery. and i think we will get more messaging around that and strong messaging around that, from central banks. in australia we have had that from governor low in the last week in his appearance at the treasury select committee. there is going to be that kind of messaging coming through. it will be interesting to see how far the fed goes in terms of that explicit guidance on tying the federal funds rate to trajectory for inflation.

oxford economic chief economist. >> an interview coming up with the philippine central government, and you can catch that at 11:30 a.m. in hong kong, 1:30 p.m. in sydney. coming up that trump administration authorized a coronavirus treatment ahead of the public and national convention, we have the details. this is bloomberg. ♪

the trump administration has granted emergency use authorization to a treatment that uses blood plasma from recovered covid-19 paceman -- patients. >> 1000 americans have enrolled to receive this treatment and it has proven to reduce mortality by 35%. as we see u.s.es

cases starting to show signs of stabilization. let's give more from -- left get more from ross cranny, our washington editor -- ross crosby. -- roz krasny. >> it allows commercial distribution from -- for the allow methodology and may any factors of plasma products to ramp up to more of a commercial level. ros: we have to keep in mind this treatment is being used on a per mental basis -- on an andeme mental basis -- on experimental basis. by the mayo clinic and others. this wraps it up to another level. some would say it is not had enough clinical trials to know how effective it is but it has had steps in the right direction. terms ofat we hear in

a rnc starting this week in terms of how the trump administration has dealt with the pandemic? did see a survey today that most republicans believe that trump administration has done a good job with the pandemic. than anynk more apology or anything like that you will probably hear more of a victory lap from trump, and many speakers, or his family. as we know, president trump has referred back to china as the origin of the virus, blamed china for spreading the virus, say you will probably hear more of that. there could be more tributes to first line workers and doctors and nurses who have been working with the virus patients. i don't think there will be any sense of apology. going in with something like this plasma test will show this administration is moving forward.

at a time when certainly americans are quite polarized about the response to the virus. editor roswashington krasny with the latest. the republican convention starting monday at 10:00 p.m. in new york. founder spoke to bloomberg about balancing business and politics ahead of the u.s. election, and why he supports joe biden as the next president. do not likely partisan politics, it is not a field i enjoy. but i do think there are people that inspire us to become the best we can be and rule by uniting us, as opposed to trying to divide them and sow fear. in this case it is clear joe biden is a decent human being who cares about america and has sacrificed a lot and cares about

our country. i am, not a democrat or republican. i'm a proud independent and there is no doubt in my mind that joe biden will be the man for the moment to unite our country in terms of the differences and protect our democracy and values we have taken for granted but are under threat. >> daniel, you have gotten involved in important issues around the world, immigration as you come from mexico city and in the middle east with israel, palestinian relations. can you simply be kind and just stand for something. at simply you have to push back, don't you? >> when you talk about immigration, i am very respectful of the armed forces, the need to have secure borders. i think you can do that with compassion and respect, and thinking about how we are by to welcome the best people to make our country the strongest it can be. i don't term ever the specific stats but a staggering number of people who are the ceos are

founders of a fortune 500 company are immigrants or children of immigrants. i am an immigrant, my father was liberated by american soldiers. we will never forget how america welcomed him and welcomed us. be able to have created thousands of jobs, and be a proud american and so many ways if i had not been welcomed. and i think there is a way to protect our borders and do it with kindness and respect. you know, a lot of people confuse kindness with weakness. but it takes enormous strength to do the kind thing. you know, it is different from being nice, you can be nice and be polite. but to be kind and be strong, and stand up to the bully, kindness requires a protagonist force of action and it is what we need today. >> daniel, you are a very

successful entrepreneur and businessman. give us a sense of how your business has done under donald trump and how it might fare under joe biden? do you have any concern there? business, i have been in business since i finished law school, 26 years, and i'm very blessed that after 10 years of making a lot of mistakes that were self incurred, the lack -- the last 16 years we have grown under both democratic and republican administration's. i work very hard and am very comfortable that our business is not an issue that keeps me up at night. what keeps me up at night is rating article about how, in russia, they poisoned a person who challenged putin. i do not want to live in fear. as the son of a holocaust survivor, as a person raised in mexico, i do not take rule of law for granted. i do not take any of these things for granted. nobody should be above the law.

everybody should really respect the constitutional norms and the constitutional laws, and not take things for granted. it is really, really important for us to defend these things. i think these elections are about a lot more than whether i'm going to sell more kind bars or less, it is about where working together to defend our constitution, to unite our country, to work together, to build bridges, and to build a better future for so many people who are being left behind. >> that was the kind snacks founder and executive chairman speaking with bloomberg's david westin. the latest business flash headlines. saudi aramco shaking up senior management to adjust to low oil prices, creating a physician for portfolio optimization to assess existing assets, and taking ahead of us up and downstream operations. aramco is having to live with oil at $40 and slashed spending and investments to maintain its

promise, a $75 billion dividend even as debts are discussed targets. closee conglomerate hna to a deal to sell tech to strip platinum,am to valuing ingram at $7 billion. talks are continuing. hna has been trying to offload assets as its level angst left it with unsustainable debt. hna fought ingram in 2016 for $6 billion. games.ft is backing epic court to force apple to add it to the app its ability tot provide key graphics technology. microsoft says apple's move would place game craters at a disadvantage. next on daybreak asia, a standoff between the u.s. and china continues to deepen. where do thais go from here?

go from here?es economist from oxford will join us. this is bloomberg. ♪ businesses are starting to bounce back.

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a mixed picture in futures a crossed asia. dutch across asia. -- mixed futures across asia. ground,00 gaining rising to record. potentially modest gains across the region. in south korea we learn as soon as this week if that sort showing -- shortselling band will be extended. korean assets will be in focus along with the rising of virus infections we are seeing in south korea that may see tighter

rules when it comes to social distancing. in australia it we are seeing the follow-up from recent scandals. flipping the board to preview that. rio tinto has cut bonuses for the ceo and to top executives thought to be partially response will for the distraction of aboriginal heritage sites. at amp, boardroom shakeup is underway. the chairman resigning and that capital ceo stepping down immediately amid a sexual harassment allegation. keeping an eye out ingram group shares as well, after tbg sold its remaining stake in the poultry producer with a block trade to be executed by jp morgan this monday at a discount to the last close. lastly qantas is on watch with the airlines had to hold debt investor calls from tuesday from potential aussie dollar on. -- for a potential aussie dollar bond. its backingledging

for hong kong as a financial hub and opening up chinese financial sector amid a deepening standoff with the u.s. joining us, a formal assistant u.s. trade representative for china. the phase i one trade deal is technically on foot, we do not know much more when the set of review meetings a set to take place. we last heard from president trump sankey does not really want to talk to the chinese now. what kind of tone and policy line does the administration tread going into november? it is clearly a balance between being seen to be tough on china but wanting to maintain the checklist of successes, including that phase one trade deal? >> that is a very good point. i think the other underlying issues for president trump, as he looks to reelection, the fact that if the stock market tanks,

it is a -- f the phase one trade deal collapses, that will be back for him. likewise his agricultural base of farmers, really he structured the deal i think in personal terms, with an eye to the farmers and to reelection campaign. so, if the whole thing just crashed and burned now i do not think that would be particularly good for his campaign in terms of his looking like he was successful, or in shoring up those two pillars for him. and on the china side, there are two things. one, i think the phase one trade deal set up a number of reforms that really will be healthy for china's economy, at economic growth and development. for example opening the financial sectors to more competition. if they really move through with that, that is going to help them. because it is going to create

better institutions and stronger market incentives. nowell, i don't think china needs another set of fireworks going off, with the trade deal going down the tubes either. it also creates leverage for them, vis-à-vis the trump incentives for the election. but now, this is all in a very context, where you never know what kind of peak is going to -- pique is going to attack trump and cause him to make a change. >> to that, do you get more consistency if there is a change in leadership in november? we know that getting tough on china stance is one that garners bipartisan support, right? do you expect more or less hawkish approach by potentially a bided-n-harris administration? >> i would say you are not going

to see a foster approach to china. there is a deeply held skepticism about china's intentions among -- under president xi. that translates into, watch your back. at shore up your defenses response. harristhink a biden- regime, , would be much more organized and strategic, and potentially more targeted. at would be focused on in coping with the fact that we really do live in a very interdependent global economy. and so you need to be careful about where your interests lie. so, national security, of course. but, tearing down all the institutions of the global alienatingtem and china, so that you cannot get cooperation on other areas, is

not good. so i think they will be much more strategic, but not soft. have seen the we heavy hand of beijing on the national security law in hong dealingnd how they are with taiwan as well when it comes to the rhetoric. china's problems are created by the communist party themselves? especially when it comes to really creating this mistrust among all global leaders right now? >> china definitely has a talent, in terms of what its images in the international arena. i think that both hong kong and taiwan represent redlines for the regime, that will cause them world'se the outside viewpoints, except with regard to hong kong, given hong kong's

value as a financial center, i think they will want to tread softly so they do not kill the goose that lays the golden bigs. but there are certain issues with china, where they are looking totally in word, with regard to their to mastech -- inward, with regard to domestic priorities and their national security where they do not care with the outside world thanks. that does not -- thinks. that does not apply to a number of economic and finance areas. but i think it will just plow ahead if they are hitting those redlines. unfortunately. shery: when it comes to the trade deal between china and the u.s. we heard from the american chamber of commerce in the u.s. trade talks are continuing at lower levels. can you sustain the trade deal with working level discussions when you have a higher levels harsher rhetoric against each other? >> it is interesting, because you are not hearing lighthizer,

that u.s. trade representative. you are not hearing him with harsh rhetoric. i think we know president trump is exceedingly upset about what is going on with the covid-19 pandemic, and how it has affected the u.s. economy. and how it is effecting his reelection. and he, as we know, is blaming china, for all of this, so he has right now very angry at china, but there is a difference between that kind of global anger at china and looking past -- tactically and as a business person that where the advantages line, with regard to for example the phase one trade deal. sense,ink it would make for him to stay disengaged, and not rip up the deal, per se, given all the downsides of doing that. and let lighthizer and the other

counterparts are -- counterparts in china continue to work a little bit under the radar screens. so i do think that there is lower level work that is ongoing, and some of that is just making sure - there's a lot of details to get these reforms right. and you have got to really call china on missteps very quickly. and that is not going to be, that kind of detailed work is going to be done at the expert levels. it is not going to be done at the political level anyway. it does not distress me, it is actually a good thing, that that underlayment is being laid down. haidi: we always appreciate your time with us, senior counsel at arnold and partner. next, the back-to-back storms that threaten to disrupt offshore production. this is bloomberg. ♪

>> this is daybreak asia the first word headlines. the house of representatives passed a bill to rub at cuts at the u.s. postal services it claims what harm but by mail in november. the measure allocates $25 billion for the usps, it found live it at republican support in the house and faces a veto from president trump. the number of voters using the

mail and service in november is expected to surge amid coronavirus concerns. mass protests continue in belarus as the president puts the army on alert and warns of a threat at the border. wondered thousand people -- more than 100,000 people gathered in central minsk. claims that denies it will support a military coup in belarus. the russian opposition leader class last week and was initially denied the right to treatment. is eight says he was attacked for opposing president putin and of kremlinring critic's have fallen ill in recent months without explanation. iran says it retrieved some data from flight recorders of the doubt ukrainian plane outside iran and claims much information is unusable.

the news agency says there are recordings of the pilot talking for 19 seconds after the first missile strike before a second rocket hit. renderedd strike further black box information useless. global news 24 hours a day on air and at quicktake by bloomberg. powered by more than 2700 journalists and analysts in more than 120 countries. i am karina mitchell. this is bloomberg. oil,: let's turn to futures extent last week's gains with an unprecedented threat of back to back hurricanes taking aim at u.s. oil production. su keenan is tracking this. the storms have potential to cause billions of dollars in damage? yes and new orleans is in the bull's-eye for one or both storms. this is a city devastated by hurricane katrina 15 years ago. the twin storm front is threatening major disruption to oil operations in the gulf of mexico, the heart of oil output.

and it is causing oil prices to rise as much as .8% in electronic trading after falling 1% friday. the one to punch of these hurricanes has caused half the u.s. gulf production to already shut down, as of midday sunday in the u.s.. that is that the region prepares for back to back hurricanes approaching from different ructions, from the south hurricane marco -- from different directions, hurricane marco from the south rushing toward a potential monday landfill in louisiana. and 48 hours behind that what meteorologists say is a stronger and deadlier tropical storm laura. that could strengthen as it passes the warm gulf waters into a category two, much more destructive. storm prompted evacuation from offshore oil rigs and platforms. they have to shut down in advance of the storm. 58% of oil output and 45% of

natural gas production in the gulf is now shut down. -- haidi? haidi: saudi aramco making big changes at the top. what is the story in what they are trying to achieve? su: this has everything to do with the fact that it is a major oil company adjusting to the fact of lower oil prices. it is now putting a focus on its portfolio. it named a new executive in charge of portfolio optimization. and the newly credit apartment will assess existing assets -- the newly created department will assess existing assets. and a temporary head of its upstream exploration and production arm. we have seen saudi aramco recently make a lot of moves. it has been slashing spending and investment to preserve its $75 billion dividend as a lot of oil companies cut or suspended

their dividend. they announced they were going to pay it even as debt surges, but most of the dividends go to the saudi state. latestsu keenan with the on the saudi moves. the commodities of turkeys say natural gas in the black sea will likely be followed by further discoveries. -- bloomberg'snt spoke with a representative who said how that could alter the geopolitics. >> this is a major discovery, the first ever, largest discovery of any natural gas resource in our continental shelf in the black sea or mediterranean or aegean. it is the result of years of work on developing our own capacities. economicgy in our abilities to explore, partner

with other countries, develop technical capability. it is also the result of a different approach to our geography. famousong time, the statement, geography is your destiny, has been used in a negative sense. but here it has a positive significance. turkey is surrounded by three major sees -- seas. now we have found natural gas in the black sea. that is really important for turkey's economy. a transit been country and the energy sector and now turkey will be an energy producing country. dimension, a very significant one. that makes turkey more than just a producer of energy, but it puts turkey at a different level in terms of strategic location, relations, regional and global affairs.

>> how likely it is for turkey to find more gas in the black sea, based on your initial findings? our technicalat experts are telling us, there is a much greater potential, it is just beginning, what they discovered yesterday. it is likely as they continue drilling, over the next few months, they will be able to make a deeper assessment of what is available there. the chances are that it will lead to other fields. >> in terms of drilling, after the well which is not yet are there going to be new exploratory wells in the same region immediately drilled? >> true, that is true. the work will continue for expiration as well as drilling at the same time. we are very hopeful it will lead

to other fields in the same area , and perhaps another areas. we will continue to explore in other parts of the black sea as well as the eastern mediterranean, other parts of the mediterranean, in other places as well. we are very hopeful. presidentkish spokesman speaking exclusively to bloomberg's turkey bureau chief. fortescudetails on the from thegs report world's fourth iron ore producer. next. this is bloomberg. ♪

a record four-year profit and dividend for iron ore prices that capitals expenditures lag. dave, does fortescue expect iron eveno benefit and continue as supply-side chocks start to fade? yes, fortescue said a record earnings, huge gain from a year ago and yet again we saw the profit up 49%. so a bumper year on back of the surging iron ore prices we have seen, not only the result of

strong chinese demand but also supply disruption in brazil, the biggest competitor to austria for iron ore exports. fortescue i'm sure will expand on this throughout the day and later when we hear from the sea on bloomberg tv, and they say they will expect chinese demand to remain strong, supported by what we see in the steel sector and the real growth is still production in china and that will underpin strength in the iron ore sector. the outlook continues to be pretty positive for fortescue. shery: what we know in terms of fortescue's plans to bring on new capacity and iron ore? and the impact from covid-19? >> it looks minimal so far. fortescue are pursuing to growth projects. one will replace aging iron ore minds -- mines. and help bring on production. a second will at a premium product to the range of iron ore

it offers to customers like china. both of those are on track. spending remains on track. neither of those projects has had a huge impact from covid-19. they expect the first of those by mines to have first or december. obviously up one trick pony but a lucrative one. is there progress in the efforts to expand on the efforts from the eight sure player iron ore minor? ore miner?layer iron >> yes, it is only an iron ore producer for now but we know fortescue has been looking at copper, gold and lithium across the globe. reviewing it has been opportunities in kazakhstan, columbia, peru, portugal, among other countries. friday we reported the chairman held talks with ostroff gandhi,

in afghanistan and they had a conference this month to discuss opportunities. >> are seen reporter in melbourne on the latest on fortescue. don't miss our exclusive interview with that fortescue metals ceo who joins us live from perth just after 11:00 a.m. in hong kong. let's get a quick check of the latest business flash headlines. the chinese video sharing platform tiktok will sue the top administration sunday -- monday, challenging the president's executive order banning the app in the u.s.. they strongly disagrees with the demand it will be sold by september 15 or be outlawed. they claim a lack of due process and says it attempted to address u.s. concerns months ago. tiktok says they have no choice but to take legal action. the white house is reassuring

u.s. companies they can still work with tencent, we chat messaging app in china even if president follows through the van in the u.s.. senior officials -- with a ban in the u.s. a band wential said devastate communications for american is this is working on the mainland. apple could be the worst hit as 1/5 of itself comes through china. top investors and alibaba have been converting billions of dollars in their u.s. shareholdings to hong kong and part to avoid pressure from hong kong of potential delisting from chinese companies. investors are taking advantage of new roles easing a switch to hong kong following alibaba secondary listing last year. we are getting breaking news, on qantas.

getting a trading update at the moment and a change of the top. the qantas international ceo is set to leave the airline. we are just hearing that now. there is essentially no international business for qantas at the moment given they travel restrictions and border closures. we did hear from the ceo last week. they do not see a resumption of the international side of the business until midway through next year at the least. hearing now qantas international ceo is to leave the company, and they have been holding investor calls for a potential australian dollar denominated bond, to arrange a series of debt. investor calls to find raise to get cash flow going. coming up on the next hour of "bloomberg daybreak: asia." a flood of ipos. a jampacked week of earnings on the mainland. swayf that plus arc its

amidst the global virus to start the week. and we have a perth outlook. much more to come. this is bloomberg. ♪

shery: welcome to daybreak: asia. i'm shery ahn. haidi: i'm howdy stroud-watts in sydney. hour,p stories this u.s.-china tensions. tiktok is to sue. alibaba investors are headed for hong kong. global coronavirus cases have taught 23 million with worldwide fatalities about 800,000.

india reports 3 million infections on its own. south korea is fearing a massive surge. the first batch of chinese companies register on the nasdaq board start trading today. we'll be taking a look at the action in shenzhen. shery: let's get straight to the market action with sophie cameron in hong kong. we have japan, south korea and in -- and australia coming online. sophie: leading gains this morning with japanese stocks. at 22,000.225 stable the yen edging lower amid caution over the state of japanese prime minister shinzo abe's health. any political uncertainty could fuel yen strength. korea whereo south cases near to 400 on sunday. the korean you on at 1192 this

morning. the kospi, little change to the downside. ons after sapping a gain friday. investors are watching for a potential decision on the shortselling band that may be extended for six months. switching the board to check in on the end tiffany's. fortescue headlining. for the asx 200, we are seeing it open slightly lower after three. the worst week in the aussie dollar, a rebound. still below the 72 level. off in 10th of 1% -- off by 1/10 of 1%. by a: let's get analysis portfolio manager in sydney. chart in thet this bloomberg index. the australian stock market is the world's best performing market after argentina in dollar terms. if you're investor, you can be

thanking the strong aussie dollar we have been seeing. you could say conversely the weaker greenback. does this continue? uncertainty domestically affect where it goes from here? >> our market has performed incredibly well. when you look at how much stimulus has been pumped back into the economy, it is phenomenal. it is close to 10% of the stimulus that has been pumped into our small economy. it is having an impact. we heard so far more than 75% of the companies reported. they have been reasonably positive. if you look at some of the , they have had meaningful upgrades. big dividends have been paid out. it is actually reasonably positive. going forward, i think the

outlook at the moment is more optimistic as well even though we have a major city in lockdown at this point. most of the companies have seen the initial uplift and reasonable confidence in us coming out reasonably fast. haidi: take us through some of your peaks. it is an interesting mixture of your tech, stay-at-home pandemic. traditionale opening up stocks. >> we like to play a diversifying range of stocks simply because we can see ends of upside by both the sectors. it is not just about the current benefit. it is about the structural shift and the growth is phenomenal.

we also like companies, the asset owners. ramsey health care, which is the private hospital. both of which experienced a v-shaped recovery once the lockdown gets lifted. you will see years of strong growth for some of those cheaper end asset owners. you should have your money in many of those sectors to drive a great return. shery: what is happening to australian banks? >> that is pretty tough. space.s a tough they are facing not only cyclical downward pressure because of economic issues. it is more so the structural pressure that is imposed on them because the royal commission that took place over the last 18 months has meant those businesses will struggle to grow going forward. the increasing cost they have to

imply through their business. this is at the same time or we have the disruption of the economy. payingare not really there mortgages at this point. it is a tough space. many banks have cut their dividends. i think the outlook for growth is tough over the next one or two years for the banks. the banking regulator in china pledging too hong kong as a -- pledging to back hong kong as a financial hub. does that give you more confidence in the city? >> we have always maintained that hong kong is an important hub for asia, particularly for access to the chinese market. there have been changes more internal rates of return you require on your investment. it is going to be an important

hub for that space. i do not think it will change anytime soon. haidi: do you finally see this rotation away from tech going into the second half of this year or is this an acceleration of a pre-pandemic theme that is going to continue strongly? >> i think tech, you always want to hold some tech companies. they deliver the structural growth that many of the other businesses will not. months, what six is going to drive return are the companies that have been hurt in terms of earnings. . these are the companies that will do little higher growth because of -- that will deliver higher growth because of the cyclical returns. if anything, it is going to be a buying opportunity for some of the structural growth companies. over the long term, they will deliver the growth needed for the portfolio.

haidi: really appreciate your time. let's take a look at some of the movers early in the aussie session. we are seeing trading underway when it comes to fortescue metals. fmg up to percent after some stellar earnings. they are thriving through the pandemic to hit a prophet record. ore net profit up 50%. the dividend of 1%. 20% higher than a year ago. tinto.also watching rio one of the losers in this market so far, down by 2/10 of 1% after reporting a $1.35 billion

impairment charge and not declaring the final dividend. that was a disappointment. amp, some changes when it comes to starting. 8/10 of 1%. seeing through some of the lows we have been seeing for that stock. next, coming up u.s.-china tensions see top tech companies challenging washington. tiktok seeks to sue. alibaba investors had to hong kong. lee tells us why he sees strong day one demand. this is bloomberg. ♪

karina: you are watching daybreak asia. global coronavirus cases have

topped 23 million with worldwide fatalities standing above 800,000. virus related deaths in the u.s. rose by 998. the first time in five days the total has been under 1000. california reported its highest number of new infections in week. france recorded its largest increase since mid april. greece and mexico also report surging numbers. india has marked a grim milestone, topping 3 million infections as the outbreak accelerates. on cases increase by 69,000 sunday with almost 57,000 having died in total. south korea is considering imposing tighter health restrictions and warning that the country is facing a nationwide resurgence. australia once the recovery is under threat by the state board of closures. saysurer josh freiberg 700,000 people have regained work after being furloughed.

australia's unemployment rate will still exceed 13% and in the coming months. almost half a million jobs will be lost next month. goldman sachs says almost a quarter of workers will not return. in the early months of the pandemic, employers shed more than 22 may in jobs. most of those losses were billed as temporary with state reopening's bring back some people. 25% of sachs says temporary layoffs will become permanent. 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: president trump's banning tiktoks and we chat. we are joined from hong kong by stephen engle.

let's start with the lawsuits. what can you tell us? >> we will start with tiktok. this comes just as the republicans are about to hold their national convention. this -- we are learning that tiktok plans to file a lawsuit later today. monday in the united states. challenging the executive order from the trump administration. the two executive orders on tiktok, which is owned by bytedance. the first order came down august 6. it was a 45 day order saying after the 45 days, u.s. businesses and consumers could not use the app in the united states. it was superseded by another executive order, giving bytedance 90 days to divest the u.s. business of tiktok to an american buyer. microsoft has acknowledged interest. in a statement, tiktok says it strongly disagreed with concerns

raised by trump in the executive order on august 6, saying there were national concert he -- national security concerns. also saying there was no due process ahead of the order. separatet, which is a executive order, a group of users made up largely of chinese-american lawyers have asked a federal judge to block trump's ban on what they say appears to be all users of we chat in the united states over national security concerns. the complaint filed in court by the u.s. the users alliance claimed the ban is unconstitutional. they also claim the executive order was vaguely worded and does not define what transactions will be prohibited and that users would be at a loss as to whether they are complying or not complying with the executive order. we are hearing late last week,

people saying the trump administration is trying to assuage the fears of businesses like apple that this ban will not apply to we chat used by americans in china. haidi: beijing is offering support to strengthen hong kong's role as an international financial center. what exactly is beijing pledging? surprise that beijing wants to continue to see hong kong continue to play that role as international finance center. concerns have been raised over the yes -- over the last year and a half since the national security law was implemented by beijing. the banking regulator in china says that china will provide supports for its financial institutions and continuing to do so in hong kong and offer services to residents and companies. the sanctions that have cropped

up from the united states and china over hong kong following the national security law puts a lot of international banks, forcing them to walk a tight rope on a regulatory front to can fly with a -- to comply with the national security law and sanctions. in particular, those international banks that do not want to be iced out of the u.s. clearing system. statement says at present, hong kong's financial market is generally operating smoothly and the exchange rate system, which is known as the dollar bag, has a solid foundation, which reflects the confidence of the international market in hong kong. the statement says hong kong's status as an international financial center will not be weekend, what it will become more prosperous and stable in the future. we will have to see about that. engle with the

latest. coming up next, the pandemic passed two global milestones. 800,000 deaths and 23 may in cases -- 23 million cases. we have the latest on the coronavirus front. this is bloomberg. ♪

shery: we have breaking news. we are hearing from liberty times that while way -- that suppliers toing suspend providing parts. commercially available chips have been banned when it comes to supplies with huawei. huaweiay asking -- asking suppliers to suspend providing parts.

we continue to see more pressure on suppliers around the world when it comes to giving these chips. we could see more impact on suppliers in taiwan and south korea. do watch out for those stocks. and other breaking news right now. resignandhi is likely to as the national congress chief. offer herely to resignation in them beating that is scheduled to be held monday -- in the community meeting that is scheduled to be held monday. we will have more details as we get them. haidi: we continued to watch the impact of the pandemic. the coronavirus hitting two milestones over the weekend. 800,000 deaths and 23 million cases. in asia, india surpassed 3 million cases. south korea is warning of a potentially massive resurgence.

let's get the latest from jodi schneider. let's start off with india. what are we seeing? jodi: india is very worrisome. it crossed to the 3 million mark in terms of virus infection. the outbreak is accelerating through the second most populous country. we had seen it focused in big cities like mumbai and new delhi. now, we are seeing these cases go throughout the country, which has been very concerning. infections rose by more than 69,000. fastest growing epidemic in the world with 65,000 infections being reported each day. higher than the u.s. and brazil, which are the two most affected countries in the world. this poses a challenge to prime minister modi. moving from the big cities to private villages with a medical

infrastructure is often much weaker. -- [indiscernible] just how bad it is. shery: south korea seems to have rained in their outbreak in march. i guess the church gatherings have not helped. jodie: south korea is an example of a country that seemingly got things under control and has often be used as an example as to how to handle testing and contact tracing shared they have outbreak that they are trying very hard to control. they adapted in june a social distancing system with three levels of restrictions and expanded this level two rule already in place to the rest of the country that limits gatherings to 50 people or more

indoors and limits events such as weddings. level three would prohibit meetings of 10 people or more and would give authorities the power to limit business and shopping hours. this is something the government is considering giving this resurgence. haidi: in hong kong, caseloads are setting to come down. there is increasing pressure on the government to lift some of these restrictions. jodi: hong kong is an interesting situation. the virusely has kept outbreak under control. 4500 cases. 77 deaths. comparatively that is low on a worldwide scale. the third outbreak is where you have seen most of the deaths and cases accelerate. in the recent weeks, it has come down. 18 was the number on friday. there is a lot of pressure on the government to lift some of these very tough restrictions. you cannot eat out after 6:00

p.m. gatherings of no more than two people. closure of all kinds of other places. cinemas, spas. that kind of thing. whether it gets listed or not is a question. part of this is how to open carefully. part of this is a somewhat political issue as well. the government postponed for a year and election that was supposed to happen on september 6. criticism from the opposition, which had hoped to make gains. relaxing social distancing gave the impression that this was political in nature. shery: jodi schneider in hong kong. a little more detail on the indian local papal report. sonia gandy likely to resign as national congress chief. this is expected to be at a high-voltage mode as hair-raising -- her resignation

will not be accepted by the cwc members. she was appointed as an interim president a year ago. haidi: let's take a look at some of the movers so far in the sydney session. reliance is jumping the most in two years after its result beat estimates. qantas seeing a down of 2.3%. developments including the international business ceo announced to be leaving. we do not expect the international side of the business to resume until midway through next year with the latest estimate we had on friday. the airline is set to hold debt investor calls on tuesday about a potential aussie dollar denominated bond as it continues to get cash flow, keeping its head above water as these border restrictions and travel restrictions impact travel. a health insurer is folding. a 40% drop in it comes to annual profit.

a poultry producer is down by 3/10 of 1%. shery: let's get a quick check of the latest headlines. recordue metals recorded earnings. powered through the pandemic. net profit rose 49%. four and three-quarter billion u.s. dollars in june. the final dividend of one aussie dollar a share is 19% higher than a year ago and reflects the company's optimism. saudi aramco shaking up senior management. it is creating a new position of portfolio optimization to assess the existing assets and is changing the head of the up and down operations. up, the first batch of

ipos under the new latest ration rules. we will discuss with alexious l ee next. this is bloomberg. - [announcer] imagine having fuller, thicker,

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haidi: let's take a look at how we are shaping up at the start of the trading week. sophie: stocks are trading mixed this monday at the start of the final week of august. the cosby eking out gains -- the kospi eating out gains. the nikkei -- eking out gains. australia with earnings very much in focus. asx 200 losing 2/10 of 1%. after pay outperforming. the company will expand into europe. we are comes to sectors,

seeing the tech verily taking a breather after last thursday's stumble. that was the worst since march. eighed suppliers may be w by a report. chinese tech stocks are in focus set for thenext busiest days of listings. japan's mothers index is the big winner. almost three times a gain seen for the chinext. also outpacing the nasdaq. e-commerce driving the appetite for this small gauge in japan. shery: that tech rally a global theme. batch listed on the

board. joining us is the head of the chinese strategy research, alexious lee. give us your assessment of what trading will be like in the beginning with the new registrations in terms of the impact on liquidity and profit-taking. what are we going to see? alexious: thank you for having me. as we all know, the new registration is completed. we have 18 new ipo's coming forward. about 22 billion of capital last week. the new trading system will have some near-term impact to liquidity. all of the retail sure investors will have to register [indiscernible] is at the back of regulators extending the daily trading limit and also in terms

of how stock will trade. mind, -- in [indiscernible] why we see some volatility with the index. we think a broader implication is there might be some price action, more volatile price action. year will see some attentional profit-taking. registrationar sees some by up opportunity -- some buy up opportunity for the ipo's. we have an extension of the trading limits. this is very correlated to how the -- [indiscernible] haidi: how much of a testing ground will the chinext the across china? will beijing use this as an

example of what they can do next in order to loosen their grip on trading? alexious: definitely. thefirst step is to use micro test, and then, moving to the chinext. we think this is a broad testing ground. it will be rolling over once the policymakers find some of the measures. we will look into the shanghai composite. this is definitely some of those insights. it will be -- [indiscernible] .lso by the retail investors for this market to be more globalized. growth stocks on the

-- and chinese stocks more broadly a good bet at the moment? we know in the context of the u.s. china trade tensions in the diplomatic spats that china does want to encourage these champions. think the chinext does not mean that. is of the key things now given there is more demand for gold listings in asia, the star is still the best method. is more unabated -- [indiscernible] the pace of listing into mainland china. this is something which is probably not a capital market response. it is good for the broader economy.

that particular -- [indiscernible] we will have to see that begin --to [indiscernible] we do not have the luxuries -- [indiscernible] many of them already included in the inflows. haidi: what we have also seen and i wonder if it is a part of the trend is alibaba's investors converting u.s. stocks for the hong kong equivalent. is this something along with the theme of chinese companies coming home that you think will continue? there are two phases

to that. the first one is for most companies, if they start to dangle above a chinese market development, you want to have a secondary listing in hong kong bar china. it is about the currency and how you want to list and where the focus is. definitely when investors of this stock are decoders, they want to decide if they want to the transaction in the u.s. -- want to do the transaction in the u.s. or hong kong. that depends on market liquidity. we do not think investors will acceleration of conversions to hong kong are mainland china. we think a secondary listing in terms of the focus and for risk aversion is a broader trip. the head of china's strategy research. we will have an exclusive interview on the chinext with

the founder and ceo, stephen yen tomorrow. coming up next, in the past why some of the funding is drying up and what that means for companies, next. this is bloomberg. ♪

karina: does is daybreak asia. president trump has welcomed a coronavirus treatment that involves blood plasma from recovered patients, saying it will be expanded to more sufferers after the fda approved the use. and makes it easier for patients to access the product, which the president has promoted even though the full effectiveness has not been proven. retrieved datas from the flight recorders of the downed ukrainian flight. it warns much of the information is unusable. a news agency says there are recordings of the pilots talking for 19 seconds after the first missile strike before the second strike. the russian opposition leader has been flown to germany amid claims he has been poisoned. he collapsed last week and was

denied the right to travel for treatment. has been say he attacked for opposing president putin and it may be some time before it is known what happened. a string of kremlin critic's have also fallen nail without exponent -- fallen ill without explanation. a man convicted of the mosque shootings in christchurch will be -- 40 attempted murder and one count of terrorism. the first such conviction in new zealand's history. he will represent himself. 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. u.s.-china tensions continue to rise, the funding that helps build mainland tech is starting to build up.

more roadblocks for venture capital. joining us to discuss is our senior editor for asian finance. why are the funds drying up and what sort of data are we seeing that suggests the increased pressure from the trump administration is playing out? >> this has been a challenging year for funds in general given the pandemic and the recession. particularly pronounced r the u.s. funds that target -- pronounced are u.s. funds that target china. the u.s. has been hit as well. not nearly as badly. this is all part of the china chill that is coming out of washington. pressuringey are funds to think twice. in next cent stage it makes sense they are incautious.

expectationis the when it comes to u.s. endowments? question -- that is the big question. if you look at the comment from the state department, they are saying it would be prudent not to invest in china company. they may well be delisted next year. however, i think a lot of these funds are going to wait and see. like many investors around the world, their wedding to see what is going to happen in the note -- they are waiting to see what is going to happen in the november election. they think the biden victory would cool tensions a little bit. so there is no need to rush into something right now. wait a few months and see how it plays out and then make your decision. haidi: it is bad timing with the pandemic having hit funds globally. what is plan b for china's startups? do they look to hong kong? david: the funding tradition is

not as in china. it is much more they u.s., silicon valley. the exit strategy for these funds is -- hong kong is becoming a viable option not only to go public initially but also for secondary and dual listings. we are seeing that for alibaba. some of the biggest holders are shifting some of their holdings from new york to hong kong because there is so much liquidity in alibaba. you do not necessarily need to be in new york. it is an interesting alternative right now. coming up next, china's fragile economic to suck -- economic to cover -- economic recovery. the details ahead. this is bloomberg kid ♪ -- this is bloomberg. ♪

fragile recovery offering in a dangerous new phase of the four-part $1 trillion bond market. investors are bracing for onshore defaults to hit a record this year with the economy strong enough for policymakers to dial back policy support but still too weak to save many distressed borrowers. give us the latest on what is

happening these onshore defaults. >> in the first half of the year, given the level of stress in the global market and credit market, it has been curiously quiet. 17%.re delinquency fell that is in part because the government was encouraging creditors and lenders to be flexible around repayments. a lot of borers who may have had trouble paying back their notes were able to refinance their debt, accept payment delays. we know of 10 firms that did that. they were able to extend payments on their bonds. barbers managed to avoid a wave -- borrowers managed to avoid a wave of default. haidi: are they concerned about any particular group of borers? borrowers? private firms are

attracting some concern. they have been more vulnerable in china's corporate bond market. there is a pretty hefty amount of debt that is coming due. ¥3.65 trillion is maturing. we are also seeing some concern about the nation's developers. the developers have a hefty refinance -- that goes for offshore and onshore debt. some of the more obvious candidates. smaller borrowers. those that have experienced industry related stress like airlines and hotels. these are likely to remain under pressure. shery: give us another update on the offshore bond market. rebecca: offshore, we have seen a much bigger uptick in defaults this year. defaults on debt tracked by

bloomberg have exceeded last year's full total by 15%. saying that it is the smaller market from the onshore bond market, analysts are saying that the trend we have seen offshore is likely to spread onshore. that might mean we could see the onshore bond market as much as billion yen by december. road beanie is warning of a sluggish recovery or another slump unless a virus -- at -- or unless a vaccine is found. -- continue tos struggle. some medium-term challenges we are facing. we are in a world in which public and private debts

arising. they are going to become even bigger given the response to the crisis. we have the risk of a global pandemic becoming a recurrence. is gettingate change worse. geopolitical risk rising. political uncertainties about the u.s. election, the shape of the recovery. thened as a freefall and the v becoming a u. givenant to look forward the assumptions and certitudes that institutions have right now. the great model we have is there is a bridge out there and we should invest or act according to the bridge. do you believe in the bridge and kennett get us to -- and can it get us to 2022? >> i'm worried because before

the crisis, there was a massive leveraging of the corporate sector in the united states and other parts of the world including emerging markets. given the covert shock, most firms have to deleverage. deleverage means to spend less, save more and doing less capacity. less, your main labor cost. the deleveraging of the corporate sector implies there will be much more sluggish income. if and when the workers will be hired, they will not get full-time jobs with full wages and benefits. it will be more gig workers and part-time workers, hourly workers, contractors. a huge amount of uncertainty and risk aversion. you're going to have deleveraging by the housing sector.

spend less, save more and do less residential investment. that leveraging implies a sluggish u-shaped recovery. not find a vaccine, then you could become a w recession. >> if you look at the markets, they are going up. you have basically -- you are saying we are going through 10 years of misery. the market keeps on going up because of central banks. who is right? does the economy catch up with the market or does the market catch up with the economy? >> we have zero policy right if not negative. we have long-term interest rates at 60 basis points. in parts of the world, zero is not negative. central banks are buying

high-yield. those spreads are squeezed. you do not get much in credit or fixed income. people are going into stocks. not because there is a strong recovery of earnings. the 500panies within are doing well. the rest are not doing well. it is all driven by further multiple expansion rather than a real recovery. what is good for wall street is bad for main street. wall street represents big firms, big tech and big banks. street, workers, households and small and medium size enterprises. the market share of big business is going to rise. that is driving main street down.

it makes the big firms even bigger. are notd, if the firms going to survive and thrive and achieve their target by slashing labor costs, my consumption and eventually the slump is going to we can earnings and profit down the line. the market does not reflect the real economy. the mainstream is struggling. it is struggling severely. shery: we have an exclusive interview with the philippines central bank governor later on bloomberg markets. catch that conversation at 11:30 a.m. in hong kong. do not miss our big guest. we have an exclusive interview with the fortescue metals ceo later on bloomberg markets. she joins us at 10 past 11:00 a.m. in hong kong. haidi: let's get you a check of

the latest headlines. some top investors in alibaba have been converting billions of dollars in u.s. shareholdings in favor of hong kong in part to invoke pressure from washington and the potential delisting of chinese companies. investors are taking advantage of new rules easing the switch to hong kong following the secondary listing last year. tiktok will sue the trump administration on monday, challenging the president's executive order banning the app in the u.s. tiktok says it strongly disagrees with demands it be sold. the company claims lack of due process and says it attempted to address concerns months ago. tiktok says it has no choice but to take legal action. is reassuringe u.s. companies they can still work with the tencent and we chat messaging app in china even if president trump through with

a ban in the u.s. would --that the band [indiscernible] shery: before we hand over to bloomberg markets, let's get a check of how markets are trading at the moment. we are sitting. -- we're seeing the japanese nikkei and the topix flat. this as we are having health care and mitigation stocks leading the gains. we have the energy and real estate sectors dragging. we have the japanese yen holding at around 105. past that 106 level. we continue to see strength against the u.s. dollar. the kospi is up 3/10 of 1%. we do have consumer confidence numbers coming out tomorrow and maybe ok right decision later in the week. do watch out for that. coming up, we will discuss the prospects for china's market at the open when the bull, head of

research has the latest on the worker impact. we talked had the east asia regional director. bloomberg markets china open is next. this is bloomberg ♪ -- this is bloomberg. ♪

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>> it is 9:00 a.m. in beijing, shanghai and hong kong. david: we are counting down to your first trading session of the week. let's get to your top stories this monday morning. beijing pledging to support hong kong as a leading financial hub amid pressure on washington and sanctions that