the rbnz is doing its best to see through the fog.nce in new zealand's banking system. and they have strong tier one capital buffers in australia as well. you can understand his areidence that loan losses expected. the buffers should help absorb all of that. they can keep supplying to the economy. but these smaller ones, they could the less able to withstand any shocks. -- be less able to withstand any shocks. housing prices are likely to fall in new zealand. he's -- he suspects sustained impact on the economy and said some of them will fail. plenty of unknowns heading into the future of the rbnz. we will be hearing more in just a little while. shery: new zealand has been quite successful when it has come to stopping the spread of the virus. what are we seeing in terms of the government's plan for the economic path forward? paul: it is an interesting situation. the deputy prime minister who is not part of the majority party -- he is a minor coalition party -- without him they would not be able to govern -- he has broken ranks with the

on rbnz calibrates meaningful arrivals until 2022.degree that our view is right and we achieve herd immunity in new zealand through the course of the next year, borders open up, pressure for the rbnz to do negative rates should ease. that should be a kiwi dollar positive dynamic at the same time the rba is turning more dovish. that is where the balance of risks lie at the moment. haidi: always appreciate your time. andrew boak there. westpac says it is paying a acord $1.3 billion to settle money-laundering case. we get the details next. this is bloomberg. ♪ haidi: we have breaking news from that white house press conference. white house economic advisor larry kudlow saying he doesn't think there is a need for another broad stimulus package, that there will be targeted measures only, that they need to be smart about those measures. this coming on a day where we had a parade of federal reserve officials stressing more fiscal stimulus is critical. chair powell calling fiscal stimulus unequal by anything else. larry kudlow saying they wou

our next interview is coming up, the rbnz governor joins us at 9:30 a.m. in sydney.on the earnings, walmart and home depot suspending outlooks for the year despite pretty resilient sector results screen we get the results from the biggest u.s. retail names next. this is bloomberg. ♪ shery: retailers have been among the hardest hit by the plandemic. -- the pandemic. we now have the latest round of earnings. let me get started with walmart. they beat expectations but they withdrew guidance for 2021. how well-positioned are they? allhis is the bigger move retailers have made, saying it is hard to predict the future and consumer buying habits. but omar tidwell. they increased same-store sales -- but walmart did well. they increased same-store sales. they are providing people what they need. haidi: in terms of forward guidance, do we have any expectation what they think the next recovery could look like? >> it is not clear. they are working through the with current size of consumers, they are leaning buying central goods, groceries, things for the home and that is what wa

the rbnz is excited to hold the qe limit. government of lebanon has resigned after last week's devastating explosion in beirut. the cabinet quit amid rising public anger for the blast which is now responsible for at least 200 deaths and destruction of a large part of the city. the prime minister says it is the biggest disaster in recent lebanese history and blames corrupt political elites for sabotaging his administration. powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. shery: president trump has resumed his press briefing after a possible security incident at the white house. happening right now, president trump speaking about the economy and other pressing issues. joining us now for the latest is bloomberg's government reporter jimmy wilkins -- emily wilkins. the only thing we heard is the shooting happened outside the white house, it is now under control. what else do we know at this point? emily: at this point, we are learning about things as they come

the rbnz has charged ahead.ight player like that depresses volatility and curbs -- deters foreign investors and bank earnings as well. volatility is much greater than japan's, but it is declining. raisevernment agreed to -- purchases to 60% of the market as well. this is an interesting situation for the rbnz. it continues to grow. >> paul allen in sydney with the latest on the rbnz. malaysia's record budget may face a tough path to approval in parliament. opposition parties are urging the finance to allocate more andy to a covid-19 fund improved social initiatives. >> the announcement has been -- and recognize the issues we face .oday it is the largest budget ever in malaysia's history. people,support not just but also the economy. it will allow us to fight the pandemic. it is highly focused on sectors that will give the highest impact. the other point i want to talk his own health care. we are spending a lot of money to ensure the government is willing to pay. >> an aggressive budget requires rigorous spending.

the rbnz delivered as expected.: they did but it still quite a dovish statement from the rbnz. i guess there are key elements that have caused a reaction in markets. the first is, there is size of their the asset purchase program to 60 billion for the year. there was speculation this would happen, but i think it goes beyond that when they signal that there is still a range of monetary policy options they can add other assets to the purchase program, and they will think about other ways to support the economy. fairly dovish in that regard. they have also left the cash rate unchanged but haven't ruled out a negative cash rate in the future, signaling it is an option. aren't prepared yet but there is discussion and consultation, so very much signaling it is prepared to move into negative territory if needed, that it could do more beyond even the step up in the asset purchase it signaled today, including suggesting it will do whatever it takes and is prepared to do more. we have seen interesting reactions from markets.

what is the rbnz expected to do?g ie are looking out for doubling down on the amount of bonds they have been buying. they started that in march. they are seen taking that number two $50 billion new zealand. and remember in the emergency march meeting, they cut their points. by 75 basis it was a surprising move, aggressive. it was always a question of the rbnz signaling they are ready to do something like that, negative rates, or more than that if needed. they are looking at a gdp in the second quarter that is expected to drop up to 22%. it was not that strong but 1.8% growth, unemployment could get to 10%. coming,e is a budget the finance minister speaking in a couple of days to give more stimulus because the economy is in need of it and that will mean more bonds. that is one more reason why the rbnz would be ready to buy more bonds. they want to keep yields from rising especially when other countries are issuing bonds, you got to do something to make sure high.ields don't get too as for negative rates, adrian, the h

rbnz did, when steven major uses that phrase, in other words, what the rbnz and the rba does come andhey did plenty today. they complained about the strength, they added qe of the said that by foreign actors, that's the benchmark and rewrites the narrative for central banks globally. that's a proposition i put to you this morning. good morning. nejra: exactly, increasing qe talk of negative rates has move the kiwi, it's the worst performing gtech currency against the dollar. you can see the kiwi there on the first market board, but also i want to highlight what's happening in gold, collapsing below $1900 an ounce after the biggest drop in seven years yesterday. consensus seems to be saying it was that jumping real yields which actually was led by what we saw in the tenure, jumping six basis points, the most since june, partly on economic optimism but also in anticipation of record supply coming through this week. he talked about the curve steepening, we certainly saw that as well. in terms of what happened in the equity markets, we're seeing some red on the screen in asia today. yeste

we are joined this hour by the rbnz governor, adrian or. -- orr. haidi: let's take a quick look at markets. we saw that exuberance over the moderna vaccine progress really dissipate quickly. we saw the late session swing when it comes to trading in the u.s. as it has concerns over the efficacy data from moderna causing some concern. take a look at the futures in asia. we are seeing downside when it comes to futures trading in japan, australia, and hong kong, although we are looking at a little bit more of a positive open when it comes to trading on the mainland, and just also keeping an eye when it comes to energy markets as well given that we are starting to see backwardation between that june and july contract for the wti, suggesting some of the storage issues have started to ease. let's take a deeper look at the markets. investors are increasingly debating whether the broader stock market has become disconnected from the fundamentals. if we look closer, the sectors can tell a different story but the view from the president of pence wealth manage

kiwi herebe long based on that view from the rbnz?n: you can make the case the kiwi will regain some ground. if anything, that view should be expressed against other commodity currencies and the same region, really. i'll see kiwi looks across -- like it is topping out. so a return of demand for the new zealand dollar could indeed push it lower from current levels. comments also come to highlight how much of a struggle for any central bank from here would be the consideration of negative rates, and equally, how much of an important driver negative rates have become for the currencies, our outlook. to the extent the markets are now repricing the risks of negative rates, that will continue to boost the kiwi, especially against the australian dollar. the other narrative in the past 24 hours has been kudlow telling us the trade deal is not dead between the u.s. and china. many people have questioned the veracity of that trade deal anyway. and then you have the chinese lashing out at the australians. many people say the chinese are pinned i

leadthink the rbnz will the official rate on change 0.25%.icymakers in new zealand have said they accommodated to keep rates there for at least next year. i think it is time to really reflect how the economy is starting to recover following some easing in social distancing measures, and of course, also to see how the economy is hasonding to -- the rbnz injected. if the central bank decides to do something today, i think it will be likely about fine-tuning its asset purchase program. coversow, the program $30 billion worth of government of local $30 billion government funding debt. those numbers could be made bigger today. in the meantime, of course, the fed continues to push back on the idea that they will be forced to go into negative rate territory by fall of this year. we look at the bond markets and they are still hedging against that risk. is it something of an inevitability? would it create more problems than it could potentially solve in the u.s. economy? sounds like the fomc members are not too eager about negative policy rates in the

after the rbnz cut rates by 75 basis points.re likely to maintain the pressure to the downside as more countries go into coronavirus lockdown. nick, we are getting to this point in the markets where we don't really understand what each volatile move to the upside or downside means. we are trying to interpret moves into gold, for example. for an sx,u watching particular the u.s. dollar? raining --tainty is reigning. certainly the dollar, with an unprecedented cut from the fed like we saw today, you would normally expect the dollar to be a lot lower than it is. as you said, the clean shirt in the dirty basket is still relevant. we are expecting the dollar to retain is strength over the next week or so. is cut aturrency, it the moment. i think short-term, the reaction we've seen since the fed cut seems to be that the markets are not taking it particularly well. i think we probably got in the short-term, the downside for risk currencies and were probably looking at dollar-yen, and something like the a ussie-yen under pressure in the

as soon it can almost, rbnz is going to move to negative rates.this auckland outbreak somehow remind you as policymakers, remind investors that may be it is still an issue that is alive and well, an issue that is on the table for rbnz? >> i do not think the reserve banks ever forgot it. we have gone to pains to explain to people we are crowding scenarios and not projections of certainty. markets to be thinking forward. they know what we have to achieve. they know the instruments we use. i really do hope they are watching the same information. growe economy continues to and do what it is doing, today's news around the coven just puts -- the covid just puts it back into perspective. be prepared. do not run around on predictions. >> how much are you depending on the new funding for lending program to give the economy the additional stimulus it will need to keep the recovery going and maybe again there will not be a need for negative rates if it does its job. >> one would hope it is a beautiful world and the sun comes up and covid goes away. we could

the kiwi dollar to three-week low ahead of the rbnz decision.stock movers after an five-day decline, south bancshares swinging in the wake of its profit rebound. switching out the board to check in on softbank this morning on the back of earnings we got on tuesday. shares under pressure by nearly 1% and rocky 10 falling -- raku an falling after registering first quarter loss. aftera under pressure posting a first quarter loss in line with expectations. let's check in on bloomberg in sydney. rising as much as 2.7% after the posse lender announced dividends seven-year low. magellan financial rising after the fund manager pushed full-year profit with funds under management growing by 26%. because, quickly, i just want to turn to the credit market. yield floated pickup in asia's primary dollar bond market tuesday, but the mood may shift amid warnings the rally may falter on worries may plateau. , fading tos fading the lowest order ratio since the credit route dried up. hsbc warned the asian credit rally is running just a bit too hot, so expecting sp

kathleen: he also added the rbnz is not being asked to target home prices.led this saying the central bank was responsible were ready to work with the government but clearly defending what they have done so far and what it means in terms of helping to boost growth even if you are concerned about housing affordability. as we continue to monitor economic recovery, in terms of resilience, we heard from li keqiang giving a pretty up beat view as to growth prospects for next year. kathleen: he certainly did. people have been wondering about the people's bank of china. sees theer said he economy returning to its proper range next year. i want to pull up another chart, just looking about how china had that very unusual drop down in growth and now it has shot back up to just about 5%. he says china's macro policies will remain stable, effective, and sustainable. in particular, the strategy will allow consumption to lead growth. people criticize them. they'll open up to foreigners and we will absolutely not pursue a trade surplus. response toonly a president trump. i

this is as we are seeing the rbnz unleash qe.will see $17 billion upon buying for new zealand to short the economy, the kiwi dollar the longest streak of losses against the u.s. dollar since 1971. let's check in on how the kiwi 10-year yield is faring. we are seeing moves for the yield that are quite extreme. we have the 10 year off as much as 53 basis points, the biggest drop on record. i want to highlight stocks to watch in sydney as we go to the open. keeping an eye on virgin australia as the carrier has flagged more capacity cuts and the australian government whitens the shutdown. santos also in view after slashing its target by 38%. also looking at this one, as it estimates jet fuel demand reductions could be as much as 80% to 90% for the timeframe. a lot of pressure on jet fuel shortage -- jet fuel storage. >> i want to get more on what we should be watching. bloomberg's global markets editor adam haigh. what is the latest we have heard from federal reserve officials on the current state? the latest comments have been those

the rbnz governor is said to announce a new stimulus tool aimed it driving borrowing costs.s on wednesday. the program is seen as a key step toward the rbnz, cutting the official tax rate into negative territory next year. the prime minister of singapore has offered a pessimistic view of the post by race economy, saying the economy is unlikely to pick up in a vibrant way anytime soon. some sectors are showing improvement but others are expected to remain in would because suspended animation. 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: let's get a quick check of the markets. we are seeing a relief rally across asian equity markets with asian stocks at the highest 2018.since february the nikkei at a 29 year high. the korean kospi gaining ground. the march in for the asx 200, which is gaining ground. we continue to see strength for currency markets with the korean levels that we have not seen in months. kiwi stocks at a record high. hai

the rbnz staying packed as expected. they are ready for negative rates.nt and business closures. the nifty pointing to a higher open, currently up .4%. the dollar continues to rise along with real yields. the dollar index hitting a one month high. dollar trade is beginning to price in risk. we have the yuan heading for the best quarter since 2009. currently lower by .2%. we have the pboc fixing rates lower for a second day. headlinesust a few coming through. one is from huawei. it's the deputy chairman. seem huawei is still willing to buy from u.s. suppliers paid we need chips for it a lot of the networking equipment. fujifilm will be applying for radio tory approval as early as october -- regulatory approval as early as october. trialsactually suspended on this particular medication, if you will. beganed its delay and clinical tests as of yesterday. move to commodities and have a look at iron ore futures on the way down. supplies weigh rising against the recovery taking place in china. concerns over demand are being compounded by the prospect of rising a

the rbnz is.here , down tobig surprise 0.25%. that is the white line. how the two-year note yield is seeming to anticipate or open the door to those negative rates. and finance minister grant robinson, a great interview we had right here on bloomberg television, saying the rbnz at gdp reboundr the which he is looking for. he said that people thought maybe they will not sound so easy at this meeting. he said nevertheless they will consider that in a negative rate decision in 2021. if things pick up, does that mean they will not go ahead to negative rates? for now, they are really sitting back. number one you have the october 17 election just around the corner. maybe do not want to make any big moves at of that. that is what central banks are often seen doing. and this is an interim policy meeting. it is a november meeting where they have the opportunity to really lay out what they are going to do, how seriously negative rates are being considered. surprised a lot of people around the world by being ready, willing, maybe not able yet to embrace just that.

there was no change when it came to the cash rate on the rbnz, but the comments on the kiwi dollar'sion put pressure on the currency. >> it appears there could be more easing coming down the pipe. came inexport numbers line with expectations. new zealand posting a relatively healthy trade surplus for the month of may, $1.25 billion but the rba expressing concern for the impact the currency may have on exports, signaling policy tools are under active discussion. those remarks appeared to have the desired effect. the kiwi dollar, easing a little, about 64.1 at the moment. in terms of those extra measures, the cash rate wedged at an historic low, it could ramp up when august rolls around and that would be especially considering there is more issuance coming from the government area there could be more pain coming down the pipe. the first quarter gdp numbers were worse than expected at 1.6 percent contraction, but the second quarter will make that look like a picnic. the second quarter covers the period of harshest lockdown in new zealand. shery: new zealand has done well when it comes t

you have the stimulus narrative and the magical words from the rbnz, now looking at a broader range ofonetary tools. we are not done on that front. nejra: on that policy front, it was interesting that manny roman saw u.s. inflation will state for a long time before the fed raises rates. we are not getting a lot of impetus or direction today in terms of asian equities. perhaps a touch of risk appetite, but nothing to write home about. u.s. futures on the front foot after we saw gains in the u.s. session yesterday. european futures in the red. seeing a little bit of divergence in terms of the futures. third day of dollar weakness which perhaps speak to some sort of cautious risk on coming through cross assets. the 10 year yield not doing a lot. oil on the back foot after some signals of increasing stockpiles again. manus: let's dig deeper into it. the coronavirus search across is puttingstates the reopening narrative and plans in doubt. new cases have soared in places like texas, arizona, california. they all broke its record, california broke its record for new cases for the fourth time

short of a rate cut by talking about more stimulus in terms of etf purchases and a rate cut from the rbnz. attention turns to the g7 call later today. can european and global leaders do what central banks have not been able to do for markets? the move in s&p futures has been stunning as well. yousef: absolutely. you have to wonder why the fed could not wait 65 hours until their regular meeting and that is getting factored in. it is spooking some portions of the market and that is the feedback we have been getting on the program over the last couple of hours or so. s&p emitting futures -- many features showing that -- mini- futures showing that clearly. buy at thatd to level. looking at what is happening with the story around brent crude, down 4.2%. the losses have accelerated. even though on the fiscal and monetary side, you mentioned the boj, more is getting thrown at this. the reaction is negative. australian stocks is another example of that acceleration in any risk appetite or a version of risk appetite we are seeing across the board. the biggest movie nazi stocks since 1992. our top

tolly positioning the rbnz looking at more tools and steps if needed in the future.o meeting today, the bank of thailand. also expected to hold its key rate study. that is even in the face of weak growth. why is that? kathleen: we've got two central banks meeting from countries that have done pretty well containing the virus. they are expected to keep their study.es they have cut their key rate three times this year from 1.25% down to 0.5%. remember, this is the country of 69 million people. 3200to date, reported virus cases. they have done a good job. even so, the rest of asia has been hit by the virus. what does that mean? they are not going to tourist destinations. tourism is down 12%. trade is suffering as well. the latest number on exports, up 2%. they have a weight on their economy. that is up 5%. still rising. the second-best performer in asia. traders are wondering, will the bank of thailand make a comment about being overvalued? getting us ready for rate cuts in the future. you can see the rate cuts they have made there. seen.emains to be . another thing the

looking at a snapshot of rbnz policy divergence.ou have the aussie dollar topping the best winning streak since 1991 against the kiwi. negative rates in new zealand. expecting the rbnz will cut the cash rate to -50 basis rates in april. switching out the chart, made way on japanese stocks with the currency trading around a one-week high. recovery prospects remain uncertain following the gdp slump. the nikkei could be on a path to losses, during the broad rebound we have seen in asia. changing of the chart, it is not being felt, which are on track for the worst year since 2013 as the region misses out on the tech rallies that continue in wall street. southeast asia's old economy firm makes up the heaviest waiting which will longer will be the case in hong kong, adding alibaba and shalxiaomi. more on the get markets with aaron gibbs. we keep touching those record highs without really being able to surpass it when it comes to the s&p 500. when you look at the rally we are seeing in the u.s. stock market, what do you think about andbrea

still ahead, the abn c releases the latest -- rbnz releases the latest. we will have more on the report later this hour. up next, we will discuss how the current issues when it comes to hong kong will be affecting capital flows in the long run. the matthews asia portfolio manager teresa kong will be with us next. this is bloomberg. ♪ arey: u.s.-china tensions marching further into new territory on the back of beijing's new security law for hong kong. bloomberg learned the trump administration is considering a range of sanctions on chinese officials and businesses over the crackdown. what could this mean for asian markets and hong kong status as capital?al let's go to teresa kong, portfolio manager and head of fixed-income out matthews asia. great have you with us. what should we expect in terms of capital flight? we have continued to see more fears about the status of hong kong. run, capitalg always follows opportunity. if hong kong continues to be the favorite option for chinese companies to list, and it becomes the gateway to china, after we continue to

the finance minister praised the rbnz effort to ease the economic impact of the virus. they down plied the idea of monetizing government debt to pay for the qe program. the country's bond market is continuing to function and operate well, he says. bank --ly the reserve debt is continuing to operate. liquidity levels are good within the banking sector. for now, the approach we're taking is right. karina: human the u.s., the house of representatives has passed a $484 billion coronavirus aid package even with lawmakers at odds over the next rescue bill. the debate from members wearing masks and entering the chamber under strict precautions. president trump is expected to sign the legislation which is the fourth virus related package since early last month. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. i'm karina mitchell. this is bloomberg. rishaad: thanks. still to come, many exclusive directors from the nec and ask goldman president. and the credit suisse ceo. this is bloo

we expected 25 basis point rate cut from the rbnz.ill depend on what transpires over the next few weeks, the meeting at the end of the month. they have the advantage of waiting to see more information, seeing what other central banks do. it is quite possible the fed has cut 100 basis points the time vr begins at meeting rolls around -- the rbnz meeting rolls around. paul: jp morgan security chief economist, thank you so much for joining us. still to come, we do have another major event canceled. google is calling off its conference. we will have the details next. this is bloomberg. ♪ emily: quick check of the latest business flash headlines. ford motors is betting all air travel for business trips after two of its employees in china tested positive for the coronavirus. they have been quarantined and ford says they are recovering. the company says it is serving domestic and international business air travel until at least march 27. while also asking some staff to work from home. india's struggling yes bank facing more difficulty with p

the rbnz holding its first q. week auction.quidity rules to boost dollar funding. bloomberg intelligence cautions ongoing demand of dollars may suffocate asian currencies with the worst of the regions macro data yet to surface. haidi: sophie kamaruddin in hong kong. let's get more on what we should be watching with the markets. assetshe rally in risk continuing to a second day but it is really hard to see how sustainable this is before we get more assertive data on the health containment front. we can see the market a little bit confused or disappointed that the tariffs, which were deferred and not removed entirely. adam: people very reticent to take any real long-term view on the markets, even though we have had such a huge decline across across rateand -- assets. it is difficult to take that one view without seeing it peaking some of the most serious places like the u.s., in places like europe, but of course, we are continuing to see the lockdown. the lockdown in india is only just starting and that will become more and more

the rbnz in new zealand is open to increasing qw in -- qe in this rapidly evolving situation.rview saying they are very open to changing the signs of the qe program. there is a limit to how much of rbnz canrket move the actually buy, but they are urging banks to step up in corporate bond markets. they are open to increasing their qe. thankback to dr. gallo, you so much for hanging around. we have heard president trump tout game changer drugs, including hydroxychloroquine. based on your expertise, have you seen any hope we could get some sort of treatment out there fast and effectively? aregallo: the drugs that available right now are not easy to predict to be so-called game changers. i don't think it is a bad idea for testing of hydroxychloroquine. i think it is reasonable on the basis of what studies have been done in france and china. but to think of it as a game changer -- no, we don't have any proper trials near enough to make an assertion that this will be a major impact. other drugs that are coming along are interesting. they are taking time to develop. you can predict t

six of nine economists expect .he rbnz to hold its qe limits the others say an increase. reopen after the lunch break in tokyo, we up as we went into lunch. what we have is the nikkei just about the same level at the moment as we do see all but topixof the topics -- indices advancing. sony electronics giving the biggest boost with regards to all that. all of this against a backdrop of asian stocks shrugging off and seeingl concerns green out there with hong kong leading the pack, two point 1% up. indian markets, at the moment it is a situation where we have positivity going into the session, according to the nifty contract in singapore, up by 0.4%, a gain of high-frequency data from a managing service. fuel sales, growth plateaued in july and that is perhaps boating badly for the economy looking ahead. the rupee pretty much unchanged. yields edging marginally to the upside. here is a stock worth keeping an eye on. the company's top glove and it is the world's largest rubber glove maker. 450%, making it the second most valuable stock index.major stock that is due to a boom

kiwi stocks under pressure ahead of the rbnz policy decision tomorrow. yen weakening as well as spot gold extending a drop for a third consecutive session. barrel as we42 per continue to see this extension of gains after saudi aramco said demand will continue to improve. watching are also company taking a slide after the game maker said it would delay the launch of dungeon games to august 12 to comply with tencent anti-addiction system. lossestbank expanding for fifth session despite expectations ever returned to profit, the stock falling to low we last saw july 20. could yetelco giant post higher profit for the fiscal year but it has benefited from the work from home about trend, ntt. jen drug application is getting an fd -- biogen any an fda priority review. the aussie building materials hardie in sydney on the back of an earnings report. higher after biogen gets an fd a parody review. now, the significance of the grim milestone in covid-19, we are seeing cases starting to pick up at a faster rate? >> yes, it is a grim milestone. it is sobering because

the rbnz is in a more comfortable position than other central banks. rates are at a quarter percent. a change in the purchases. as we have seen from the comments, they are looking at other monetary tools. they are prepared increase as it uses at the -- increase asset purchases. at the moment, there is no need to do that. data has come on the positive side of expectations. we will wait to drop sharply. look at dairy and equity prices. they have moved higher. the only issue is that the kiwi is overvalued. the reality is with the data improvement, it is hard to say that. the opening up of the economy, eating of lockdowns have continued. things have moved in the right trajectory. it does suggest the status quote for some time. downad: the dollar going now off the back of the new zealand dollar. they are working toward a broader range. also the purchase of foreign assets. i want to get to those -- a guest we had interviewed about the economy looking ahead. , orle talking about a v, u perhaps a pear-shaped recovery. >> from a global perspective, i would argu

the kiwi dollar testing 60 after being dragged lower on the rbnz 's cuts.ck out the risk barometer. the aussie yen stalling at a key resistance level for the second time in two weeks. we are light on the data docket. australian jobs report due out in two hours. figures.worse for aussie holding onto a three-day decline. kiwi securities recommending going short the aussie versus the greenback on u.s.-china trade risks. oil steady this morning while gold is extending gains after jay powell warned of the u.s. economy and infection risks. running a sustainable business may be rewarding in more ways than one in this environment. a study by fidelity international shows a positive correlation between a company's asg rating and market performance. the study says companies at the top of the sustainability scale on average outperformed those below. joining us now for more details is the fidelity international global head of stewardship and sustainable investing. good to have you with us. correlation does not equal know.ion, as we is there just a general sense that com

rbnz, we are getting some lines through.tant governor speaking after a day they left rates unchanged. markets have pushed back expectations when it comes to the amount of stimulus along with when negative rates come through. the rbnz said they can still use it as a policy tool if retired. we are just getting the inflation numbers from japan. contraction of 2.1% year on year. a contraction of .2%. both slightly worse than expected. shery: of course all of these eco numbers, what central banks are doing all to do with what is happening with a global pandemic. just days after pfizer's positive vaccine claims, now it may be modern'as turn. announcing -- close to announcing early findings. experts believe it will likely prove to be highly effective. joining us now is dr. robert gallo. one of the co-discoverers of the hiv virus. octor, think you so much for your time today. of course we have a lot happening on this vaccine race on all different fronts. from what you are seeing so far, how optimistic are you on the timeline of when

-- rbnz?een at pains to in claim people that we are scenarios, projections, uncertainty. i'm pleased to see them engaging. we want them to be thinking forward. they know what they are doing, what we have to achieve. that they arepe watching the same information. if the economy continues to grow and do what it is doing, it's a beautiful world. .hat is a big if today's news around the covid just puts another, you know, puts it in a new perspective. be careful out there. be prepared. do not run around on predictions. kathleen: how much are you depending on the new funding for lending program to give the economy the additional stimulus it will need to keep the recovery going? and maybe again, maybe they will not be a need for negative rates if it does its job. is that it? adrian: one would hope it is a beautiful world unless something comes up and kobe goes away, and you are right, we could re-normalize interest rates. we have a lot of confidence around the funding from the ending -- for lending p

this comes after the rbnz expanded monetary policy support and is mulling the idea of negative ratess well as further moves on q. week. plenty more to come on "daybreak: asia." this is bloomberg. ♪ haidi: a quick check of business flash headlines. a top chinese developer has reported close to a profit of 2.7 billion, blaming the fall on covid-19 and promotions that offered discounts. net profit from its main operations is expected to be down 37% from a year ago, while net profit is forecast to have declined more than 45%. india's rc rci bank has raised the by a noninstitutional placement, joining indian lenders boosting funds as the pandemic threatens to push up bad loans. the bank made the offer between august 10 and 14. singapore's sovereign wealth fund gic picked up 11% of the offer. morgan stanley bought 7%. temasek holdings is the fifth-largest shareholder in blackrock after adding a 4% stake worth around $3.5 billion. temasek bought blackrock shares when pnc sold a $14 billion stake earlier this year. the companies have worked together in the past. talks are underway for a join

the rbnz, the stocks in new -- the kospi flat at 2417, easing.ng a we can expect from the india open after yesterday's advance, on the singapore contract on the nifty. india's factory output declined again, the economy struggling to reopen amid the coronavirus pandemic. looking at gold, the big story, two point 4% down, erasing some of the losses but still below $1900 per ounce. look at the yield on the 10 year, creeping up 60 four basis points at the moment. the rise that pushed gold to these record highs coming to an abrupt halt. the haven, boasting the biggest drop in seven years because of the bond yield story which had been supporting what was going on with gold. treasury bond yields climbing, cutting into the negative real rates. 10 year treasury yields jumping the most since june ahead of an expected flood of corporate and government debt issuance. positive data, helping with u.s. producer prices, increasing faster than have been anticipated. u.s.-dollar index moving up by 0.1%. biden has named california senator kamala harris as his runni

the rbnz saying there's lots of opportunities as well for it to broaden its qe.ammunition is there? if they talk about it like that, why not kind of put in the kitchen sink approach? why do we get a dripping affect that realistically is not having much of an impact in terms of propping up sentiment? jon: i would say that risk is all a matter of relative perception. it is still march and the first emergency cut was in march. the follow-up was in march. the most aggressive quantitative easing the fed launched has been in march. we are still in month one of this. while it has not happened in one day, one week, i would argue they have been relatively aggressive in doing what they do. i do agree that the fed is running out of ammunition but they are not done yet. at the end of the day, the recession playbook with fort guidance at zero. and then quantitative easing program. check, check, check. with they have done instead is moved to their crisis playbook where you get all the acronyms all the newnd things they are introducing. these are really kind of liquidity inject

. >> the rbnz parliamentary panel has been speaking after signaling negative rates are a possibility.d with the effectiveness of new zealand's kiwi program so far. increase size of an asset persist -- an asset purchase program to $60 billion. the balance of risk remains to the downside. willingnesste that to use negative rates. that, yesterday saw the kiwi dollar fall pretty hard. swaps market has new zealand in negative rates territory by 2021. up byes the cash rate november. the government says while he is kiwi, retail rates will be awful for savers and pensioners. there is an election coming up in september. it is interesting times. >> paul allen in sydney. >> the world's largest container shipper sees a u-shaped recovery after volumes collapsed in the second quarter. a ceo told us how his company is weathering the storm. >> we know the first quarter are volumes were down 3.5%. we are halfway into the second quarter now and we had volume consistent with this 20% to 25% drop in volumes. it is presumably the worst quarter this year given it is after china was closed down for several

the bank of thailand and the rbnz has posted decisions out on wednesday.ther expected to change policy. they could highlight the growing chance of the rates. we are joined now by moody's analytic economists. we have been increasingly hearing a drumbeat towards an inevitability of negative rates come by early next year when it comes to new zealand. doesn't highlight the extremes the central bank is having to go through for these extraordinary monetary policy measures? are we still going to see the effectiveness for their actions? >> i agree with you. have been pushed to their limits by the various economic challenges used by the covid-19 pandemic. and it is true that nearly all central banks have settled and lowered their interest rates to historically lower. but having said that, the zealand, whyof new there is a lot of [indiscernible] interest rates, the moody's analytics stalled is -- cashficient gas rate rate will be held at 0.25% level. we are certainly monitoring developments and communications by the central bank very closely, and we are not dismissi

the kiwi dollar also on the decline as the rbnz is on focuses well.ning. deepening across the aussie and kiwi yield curves. the 10 year yield for u.s. treasury is off by four basis points this morning. gold hovering around 5000 bucks announce. oil, brent gaining ground. let's get you caught up with the first word news. ritika gupta in new york. >> the senate has cleared and economic relief bill that would provide paid sick leave, food assistance, and financial help for virus testing. infection cases touched on 215,000 worldwide. more than 8700 deaths. president trump rostock warnings that the virus could mean u.s. unemployment soaring to 20%, saying that would be an absolute worst-case scenario. >> countries must isolate, test, treat, and trace. if they don't, transmission chains can continue at a low level and then research -- resurge once physical restrictions are lifted. >> the u.k. is starting to adopt u.k. -- measures from around the world. schools will be closed from friday. doris johnson declined to rule out walking down london itself. the infe

the rbnz has seen the most of the g10 countries over the prospect of negative rates. that's likelihood going into the next 6-12 months. most of the other currencies will follow suit. we think there's a risk that in australia, we could see the yield target on the front-end economies as well as -- as the economic downturn continues in a protracted state. both the aussie and kiwi are vulnerable to the short-term against the dollar. rising tensions out there. manus: would you short aussie n asar or aussie one -- yuab keyy trade -- yuab as a trade? manus: thank you very much. we will speak to the cfo, clifford abraham. they have given their guidance for losses this year. we will dig into the strategy and the exposures. ♪ there are times when our need to connect really matters. to keep customers and employees in the know. to keep business moving. comcast business is prepared for times like these. powered by the nation's largest gig-speed network. to help give you the speed, reliability, and security you need. tools to manage your business from any device, anywhere. and a te

have trading in new zealand underway where we are seeing a bit of a reaction when it comes to the rbnzounced saying that it was considering looking at loosening mortgage lending restrictions. not enough to support the lenders, .6% lower for kiwi stocks, this as they outlined that ratcheting down for the restriction level to stage three as of next week. elsewhere, we are seeing ready consistent downside. we had u.s. stocks falling from the six week i on account of what we have seen in oil trading prices. that historic plummet into negative pricing for the wti may contract. the only story and markets. we are seeing negative trading when it comes to the future session in japan. in australia, looking like we will see weakness as well across the energy and mining sector. coming up, stage c is missed -- capital sees some risks. this is bloomberg. ♪ haidi: breaking at the moment, goldman sachs coming out, warning of a potential further ontress for may wti futures tuesday. of course, we have pared back some of those losses on the may futures. barrel.e are at -$5 per goldman sachs saying the oi

the aussie strengthening versus the kiwi for a second day, the prospect of negative rates from the rbnzding the kiwi down, up. gold futures six-t have crude down enths of 1%. this will zero in on the opec meeting tomorrow. for the first word headlines, the u.s. adding additional restrictions on huawei aimed at cutting access to commercially available chips. it is the latest move in an increasingly tense relationship between washington and beijing. correspondent has the story and joins us now. let's get to stephen engle if we can. what are the new curbs? stephen: as is in addition to the export controls washington slapped on those who do is this with huawei in may. a large asian foundry in taiwan announced in may they would stop making chips designed by huawe'' s affiliate as of september 15, which is the deadline imposed by washington for those restrictions on huawei. these new curbs announced by the commerce department are in addition to that, and according to wilbur ross, secretary of the commerce department, closes a loophole that some of the affiliates of huawei and that huawei was

the message from the rbnz was no rate cut this year.nd as a stinging rebuke to the backdrop of central banks, monetary policy would only be a bit player. we have come off the highest. you have seen a significant rise. the biggest one-day rise since the second of december. take your mind back to last february when they said no more rate cuts. they flip-flopped. openouth korean won takes from the assessment of where we are with the coronavirus. reprieve little bit of . russia is studying the proposal of 600,000 barrels a day. can crude find a $50 floor? there was a trade in the options market for wti, brent to pass down at $10 per barrel for 2021. somebody out there having a big old punt. nejra: one more red headline. the third-quarter vision fund loss was -- but it has returned to profit in the third quarter. equity exceptionalism is how ubs has called this in terms of orities reaching records, at near records. the s&p 500 at another record yesterday. we are not seeing that today in terms of the market. that exceptionalism reflects the f

here closer to home in new ofland, the discussion breaks from rbnz is creating some premium advantage comes to trading in aussie kiwi this morning. city futures modestly positive, setting up for a flat, just a little higher at the citi open. let's turn to japan where the ruling party kicks off its campaign for a new leader later. continuing to assess shinzo abe's legacy. andreea joins us now. positive reviews for his corporate governance reforms. andreea: that's right. investors are held hurting the support ushered in by shinzo abe. you have seen the topics almost abele in the 7.5 years that has been in power. among the things he did better notable -- that are notable is unleash constitutional investors to increase profitability and capital efficiency. this is a country where traditional investors have been very hands-off. he's created this corporate governance for companies. what this did is really make japanese companies become more anditable, less insular more rewarding as an investment. we have seen profit margins and the topix index higher at the end of last year compared to the

do the numbers today -- does it move the needle when it comes to the rbnz? a lot of expectation we could go into negative rates by february next year. >> the reserve bank has committed to not changing the ocr until march. we don't think they will want to undermine their forward guidance. given how important it will be in the years ahead. fromng through this noise the lockdown, by the end of the year, the fiscal stimulus will be winding back very significantly, and the hit to tourism will really be being felt. this is really a summer story are -- tourist arrivals it was not that much of a cash flow. come summer, it will be very noticeable. so that's why we think that the economy will be showing renewed weakness by the end of the year. why we are expecting to take further action. >> you have downgraded your third-quarter gdp forecast. how big of a hit will the new zealand economy get, especially with these renewed restrictions. >> the renewed lockdown is very much lockdown like compared to the last time. short-term or severe. change theing to fact that q3 gdp

we heard from vr begins at talking about how estimates of gdp for the period -- from the rbnz for the period. 2.7 billion kiwi dollars, shery. shery: we are seeing u.s. futures holding steady as stocks rose. we have more positive sentiment that u.s. and chinese trade negotiators could be speaking as early as next week. investors shrugging off jobless claims, which topped 3 billion for the past 3 million for the second straight week. the s&p 500 was let higher by energy and financials. banky interesting that stocks to find the move and treasuries. you can see two year yield plunging to a record low. the nasdaq composite turning positive for the year, wiping out losses as much as 24%. take a look at what oil is doing for the moment. it is still at the $23 per barrel level, but we had a really wild day in price swings in oil. we saw them wiping out earlier gains of 11% at one point. there is still a lot of concern over the market glut. chineseop u.s. and trade officials speaking as early as next week about progress of implementing the phase one trade deal. this comes after president trum

of the rbnz protects the bond market but buying not ruled out, that is offsetting buys by foreigners.rading volumes could signal more kiwi stability ahead. haidi: we are going to get thoughts on the direct monetization of new zealand debt in a moment. the country has been in one of the strictest lockdowns of the world since march 26. there is a light at the end of the tunnel. we will partially relax on monday and allow parts of the economy to restart. we are joined by the new zealand wonderful toter, have you with us. we have been talking about how a loan and how unprecedented the approach new zealand has chosen to take in attempting to eliminate the virus, not just suppress or mitigate. i wonder if you looked at modeling and forecasting that suggested this may enable a quicker, more robust rebound, or is there the risk even if new zealand eliminates the virus, the rest of the world is still shut down, so the economic woes will continue? >> thank you for having me. the approach we have taken is with the economic response is a strong public health response. the sooner we can get it und

manus: and yet, when you listen to the rba and you listen to the rbnz, that's a different tactic. pick up those themes in a moment. the clock ticks down on daybreak europe. we will return to the subject in just a moment. joseph little with annmarie hordern and myself. coming up, reflation trade. it's back. economyt endure as the comes first in the great bond market debate? this is bloomberg. ♪ ♪ lost the trade war with china. joe never fought it. he's been a cheerleader for communist china over the last several decades. >> the presidents trade war with china. he lost that trade war. you lost it. what ended up happening? a so-called trade war with china. america lost 300,000 manufacturing jobs. farmers have experienced bankruptcy. annmarie: some of the highlights their of the u.s. vice presidential debate between kamala harris and mike pence. it wasit got feisty but a little bit more constructive than last week. president trump stuns a markets by ending months of stimulus talks before reversing course and a series of tweets supporting piecemeal measures. one house is not too concer