u.s. to change china, the u.s.annot stop the historical process of the 1.4 billion chinese people towards modernization. some u.s. political forces are hijacking the bilateral relations and pushing them to a new cold war. spiral the downward being exacerbated by china's introduction of the hong kong national security law which would criminalize harsh criticism of the ruling party. he warned the u.s. not to challenge china's red line on hong kong. this after secretary of state mike pompeo congratulated taiwan's president on her second inauguration. the foreign minister saying reunification between the two sides is an inevitable trend of history. no one will stop it. david: suffice it to say by the day, relations and tensions between the two are ratcheting up on many fronts, trade being one of them. talk to us about the new and incremental implications on oh -- one hope is the phase one trade deal with china said it is -- which china said it is going to do that. but kevin hassett told cnn the u.s. is studying penalti

u.s.-china bilateral relations. covid makes it worse. the u.s. on process probably makes it more complicated. aroundsiveness i the region, including hong kong, south china sea, india, and elsewhere, make it all the more difficult. these are tense times and we would urge de-escalation on all sides. ambassador, we are getting new details from the china embassy statement essentially talking about have narrow the category said to be seriously jeopardizing national security. in terms of the foreign meddling, saying they would take necessary countermeasures. what are those countermeasures that u.s. companies would be worried about? what could be the response? what are the implications? : the chinese officials have been talking about and unreliable entities list for the past year. they look at it differently than the hong kong situation. they look at it as a counterpart to the u.s. entities list managed by the department of commerce. however, this type of sanction against foreign companies could be used under chinese law in any way that they want. , arbi

u.s.-china tension. .he u.s.g hong kong this is bloomberg. ♪ nejra: good morning from london, i'm nejra cehic. this is bloomberg "daybreak: europe." the u.s. says hong kong is no longer autonomous from china. new securityass legislation today, but chancellor merkel talks about more cooperation from beijing. the united states reaches 100,000 rotavirus deaths. anthony found she sees a good chance for vaccine by year-end. boris johnson se u.k. to move on from around over his top aide. and a 9 billion euros german rescue requirement over lending plots at key hubs. it sets up a showdown. welcome to "daybreak: europe." tensions area still alive and well. something the markets are digesting overnight as well as a rate cut from the bank of korea. we also have reports a president trump is thinking about an executive order to penalize tech companies, meaning nasdaq futures have taken a little bit of a hit. asia and s&p features in the green. of $2.6 trillion. will it go through? that is the question, but quite a big breakt

u.s. relation is. historical china and the u.s. as the established diplomatic ties. for decades when who you know heads the center for china and globalization think tank in beijing and has close ties to the chinese government there is a wide. consensus among. got officer stranger on our go more among business community that somehow us on a more. it's back on china and the current state is they're very serious and it's very dire i think we're at a point where tensions bilateral tensions are really really high. now days. lot of fuze us china relations from a transatlantic perspective she spent 20 years as a china expert at the french ministry of defense now she's based at a us think tank she points out that the coronavirus crisis isn't just putting the trumpet ministration under political pressure but beijing too and that adds to the danger if there is a prospect a recession in the next few months and then there's always the possibility that the regime will want to deflect the pressure the internal pressure on something else and the possibility of conflict is not at to

u.s.-china tensions. dys ceo losing for first -- huawei's ceo losing her first bid to stop extradition. this is bloomberg. ♪ another flashpoint in the mounting u.s.-china tensions, the huawei ceo has failed to persuade a canadian goods to stop extradition proceedings to the u.s. it is straining relations between beijing and ottawa. our reporter is tracking the story. how definitive is this victory for the u.s.? reporter: this was really mung's first chance at having the case thrown out. it is early victory for the u.s., not surprising. history shows it is difficult to beat tradition from the u.s. to canada. not entirely surprising but she had shown some real competence before the ruling, standing in front of a vancouver courthouse, displaying the victory sign on saturday. she had been expecting to emerge with happier news. those hopes have been dashed. yvonne: it seems like this is not over anytime soon. what does it mean for her going forward? it says the extradition hearings will continue. they are likel

u.s. to change china, the u.s. is not able to stop the historical process of 1.4 billion chinese people towards modernization. we must be vigilant some u.s. forces are hijacking relations to push towards a new cold war. that downward spiral being exacerbated by the adoption of the hong kong national security law which would criticize analyze first criticism of china. they said this did not affect the cities agree -- degree of autonomy, reiterating that hong not is an internal a fair, -- cautioning the u.s. not to challenge china's red line. pompeory of state mike but tradition -- bucked tradition last week and congratulate of the taiwanese prime minister on her second reelection. the chinese say there is no one who can stop unification. tensions between the biggest economies are ratcheting up when it comes to the trade front as well as the financial markets front. are we talking about entering a new era of the globalization even as the phase one trade deal supposedly is going to be upheld by beijing? selina: that i

u.s.-china those tensions, markets are complacent to the mounting tensions. the u.s.ement rolls on. each day, we have new evidence that the relationship is permanently changed. yvonne: you seem to be quite bearish when it comes to equities. you are focusing on the fx side. eleanor: if you look at fx, it is clear volatility is back in to the fx space. bydo have a market driven the positivity of the slowing covid case growth and expansion in liquidity at the moment, we do maintain the opening and unemployment realities are going moreme to fruition once and the reopening realities are going to lag behind expectations. given that we have a little bit , we do seeomentum downsideties on the and in terms of playing that longer-term option, we could see decent risk award if we see a spike in volatility, whether we see tensions mounting or whatsoever. yvonne: thank you, eleanor. joining us on the line from sydney. japan ends its state of emergency as coronavirus cases continue to decline. this is bloomberg. ♪ haslinda: japan is set to lift the state of emergency in tokyo and s

china. companywere a u.s. listed in the u.s. as inventing 30% of its revenue, we would not tolerate that, but that is china, that is the game. erik: at one point and i know you are aware of this, the market cap exceeded $12 billion. what does that tell us about the conventional wisdom that big chinese companies are ok, it is the small ones that you need to worry about? anybody't know why would say the big chinese companies are ok. one of the thought exercises in fond of doing with people when we have little debates about china and chinese companies is to talk about alibaba. , itre alibaba went public had a subsidiary called alip enny. -- alipay. ink ma literally took alipay 2011. several months after he took it by transferring legal ownership to himself, the other shareholders discovered it and at that point he went to the board and said, i don't think it was legal for you guys to have a share, so that is why i did it, which is a total lie. if that were the case, there would have been discussions ahead of time. this he took it, h

example sells more cars in china than the u.s. and china. largest market also at us so so. easy but some decoupling is already happening the u.s. has banned american firms from working but the chinese 5 g. mobile networks giant while away and as the pandemic drags on more and more sectors might bring their supply chains back home if finance gets hit by the decoupling trying to that could mean a much bigger break that is starting to unravel not just in trade through the trade was not just through technology where the united states is trade union creasing the restrictive approach not just in 5 g. but prospectively in financial markets as well and if the economic ties in bind unravel then you begin to look at the characteristics of a cold war we've been through once before they would talk and so no trump is threatening to push down that road to economic decoupling remember the interview with fox business that we flashed up earlier where he talked about cutting off the whole relationship with china and said it would even save hundreds

china warns the u.s. that it risks further worsening relations between the two countries, but european stocks shake off the tensions and start the week higher. bayer settles. bloomberg learns the chemicals giant has reached deals on a substantial number of roundup lawsuits. the stock trades higher in frankfurt. and ire and fury -- boris johnson faces criticism from all sides after standing by his top aide, who broke lockdown rules. this is bloomberg "surveillance." i'm nejra cehic in london. happy bank holiday. for the u.s., let's get the first word news with leigh-ann gerrans. in hong kong, protesters gave their biggest demonstrations in months. against --d two gas was used against demonstrators in a shopping area. at least 180 people were arrested. china warns that religions are being pushed between them and the u.s. with a new cold war. wang yi, the foreign minister , warned the u.s. not to cross beijing's redline on taiwan. in the u.k., oxford university has reportedly run into a hurdle are developing

the top negotiators for the china and u.s. see favorable conditions for the bilateral trade deal, and cooperate on the economy and public health. according to china's ministry of commerce, they spoke on the phone to robert lighthizer and treasury secretary steve mnuchin. joining me to discuss the overnight news is annmarie hordern. what was discussed on this call? : we have a statement from the united states trade representative about both countries pledging to create favorable environments to implement the deal and make sure infrastructure is in place for that. the key and critical part of this statement is that both parties will meet their obligations. they expect to do that in a timely manner in spite of the pandemic. the deal calls for china to buy an additional $200 billion of goods and services from the united states over two years. because of the pandemic, china is behind pace. it is crucial for that reason. it was more of a positive tone in rhetoric during washington and beijing compared what we have seen for the paschi

that's right he had a number of questions about the china u.s. relationship and not surprising this bilateral relationship has been on the rocks for months and some people have said that it's in a phase of a new cold war and he seems to have agreed he was saying that china and us as the biggest developed country in the biggest developing country have more to gain from working together than competing with each other he also said that china does not want to change all replace the u.s. and the u.s. should stop trying to change china system and basically the 2 should recognize that they treat both have different political systems and respect each other he also said that many in the us are wanting to smear china and he spoke specifically of a political virus that is circulating in china in the u.s. and he said that u.s. leaders would do better to use their precious time to save lives affected by the corner virus rather than placing the blame on china's doorstep let's have a listen to what more you have to say about. she being with us in its most regre

we must be good judgment against the fact that some us political forces hijacking the china u.s. relations in an attempt to push our 2 countries to the brink of a new cold war decades ago if you want is poor press people behind the iron curtain to taste freedom and a coca-cola bottle so now you need to find some 21st century poor oppressed people who are just busting for your liberty i was. i. was i was and with china about to toss in north hong kong it's the part that pretext presidential role as global finance of the freedom to have a hong kong has flourished as a bastion of liberty the united states strongly urges beijing to respect hong kong's high degree of autonomy democratic institutions and civil liberties which are key to preserving special status on the us law and you don't even need to splash out of marketing you can see here some of the old posters because conveniently the enemy you are fighting all those cold war years ago there's a menace is still hanging around swinging sickle media's focus on the current pandemic risks mess and the bigger picture of the challenges

u.s.-china tensions weighing on sentiment. the u.s.that could prompt the listing of chinese stocks on the u.s. exchanges which is impacting stocks across the board in asia. we have the shanghai comp currently at 2885. stay with us. this is bloomberg. ♪ haslinda: it's 11:29 a.m. in singapore and hong kong. you are watching "bloomberg markets: asia." here are the first word headlines. could seeenate chinese companies barred from america. as relation shall bit. sour between washington and beijing. they are not controlled by a foreign government. john kennedy says they want to play by the rules. lawmakers are critical of beijing and midst the coronavirus outbreak. the governor of hong kong has added his support to democracy, saying they should stand up for their beliefs. he was addressing the foreign correspondents remotely on the city's future, saying he has no problem with china, but criticizes the communist party. hong kong's economy has -- collapsedth the due to the fallout of the coronavirus. >> where will the chinese communist party

more analysis on china-u.s. tensions ahead. years asfman boasts 30 a resident analyst and business developer in china. he joins us later. plus, huawei caught in the crosshairs. we will ask its chief security officer in the u.s. how long the company is prepared to fight the order. still ahead, trump lance to punish social media companies for how they plan to please -- for how the police content. this is bloomberg. ♪ you are watching "daybreak australia." global coronavirus infections are approaching 6 million, with deaths approaching 360,000, although the rate of growth is continuing to slow. lls the cliento for the first time in the pandemic, a sign people are starting to return to work. for 40% ofaccounting daily debts from covid-19. worthsays the economy is reshuffling after the fallout from coronavirus, even as governor abe eases the nationwide emergency. the labor market is weakening and business sentiment following. the government also revising downward outlook for exports. india continues to be a coronavirus hotspot in asi

u.s. and china. that is next. bloomberg. ♪ karina: i am karina mitchell at the first word headlines. the u.s. senate passed legislation that could see chinese companies barred from listing in america as relations foul further between washington and beijing. the bill requires companies to certify they are not controlled by a foreign government. john kennedy says he wants china to "play by the rules." lawmakers have been increasingly critical of beijing amid the coronavirus outbreak. the last governor of hong kong has added his support to democracy demonstrators, saying they should end up for their beliefs. chris patton was addressing the foreign correspondent remotely on the city future, saying he has no problem with china but criticized the communist party. hong kong's economy has collapsed amid months of street protests and the fallout from the virus. the bank of england governor says this time is right to examine how low rates can go as economies struggle with the fallout from the coronavirus. the bank is activel

u.s.-china tension story more one for the autumn? is a sense now this is going to remain not very much in the background from now until the u.s. election, frankly. these -- either side appears ready to back down and make it a away -- if there had been --nt where there was frankly, i think it is going to stay with us from now until then nervousness,n particularly about global trade. is ank global trade advancement already. i do think when we heard the final nail inhe the coffin of globalization with the pandemic, the u.s.-china trade spat, there were a couple before that on the list, being hammered in every day, i think that is with us now and it is not going to go away. volatility,rms of when we were talking earlier and you were talking about how you would express a weaker sterling, doing it against the yen, talk to me about the relationship between volatility and the yen. one would think if we had a collapse in volatility in g10 effects, that would speak to a bearish yen. but your view is different than that. kit: my view is that the

u.s. secretary of state says the city is no longer autonomy's from china and doesn't merit special economic treatment. and the canadian judge rules that the u.s. extradition case against while weighs its chief financial officer can proceed. hello barbara starr you're watching al-jazeera live from london also coming up president trump threatens to shut down social media platforms after twitter labels 2 of his tweets unsubstantiated as brazil's best told heads towards 25000 a poll finds that 60 percent of brazilians have supported stricter social distancing measures. and despite stormy weather a space x. prepares to become the 1st private company to send astronauts to the international space station. hello thank you for joining us the u.s. secretary of state has the leverage a withering statement on china saying it's abandoning its commitment to preserve hong kong's autonomy might compel says the proposed national security legislation for hong kong is a disastrous decision and means the city no longer warrants especially economic treatment that's a move that puts at risk billions of dollars i

u.s. and china. actually we have u.s. futures pretty much ignoring all that with them essentially in the positive column. china has been responding to accusations from president trump, warning it will safeguard its sovereignty and interest and weapons -- and threatens countermeasures. this is against the backdrop of the national people's congress planning to sell bonds and admitting gdp targets this year stemming from uncertainties due to the global pandemic. ourinda: let's get to markets, anger -- markets coanchor tom mackenzie in the forbidden city. china dropped its gdp target for the first time since 1994. that is significant. tom: it is. our bloomberg sources expected they would do this, but the economists weren't entirely sure. they have dropped the gdp target completely, facing up to the economic reality. this was the result of the coronavirus. you saw first quarter gdp in china drop. surveys suggest you will get 1.8% growth for 2020. they are giving themselves space to react to this virus and put a floor under grow

u.s.-china relations go. rd from xi jinping speaking to the who earlier in the week, putting this on global liberal champion hats, and i want to throw up this chart putting the emerging establishments. the u.s. versus china when it comes to the share of global gdp. china is quickly catching up to the u.s. i wonder in terms of the diplomatic super aspect, does the u.s. have a chance to take the high moral ground with its response to what beijing is planning to do in hong kong? hong kong, there is just no graceful way for beijing to manage the rather special circumstances of hong kong. but coming back to that basic notion that china is carrying the flag of globalization more in recent years, it depends on how you look at it. if we take all financial investment in and out of china divided by china's gdp size, china is less than half as global today as it was eight or nine years ago. while the rhetoric is very much about china's global financial a lender,including as provider of humanitarian assistance, if we look

u.s. and china. the u.s. introduced legislation that would punish chinese officials and entities involved in enforcing this as well as .laced sanctions on banks this is more of the rhetoric between the u.s. and china that is only expected to escalate ahead of the presidential election. year, the chinese government abandoned its practice of setting an annual target for economic growth. do they promised to do and put in place extra? gdp target is the annual anchor that really sets the stage for policymaking for the rest of the year, providing cues for officials to allocate their spending. the fact that they are going to abandon this practice really does signal the extent of uncertainty and disruption caused by the pandemic. we did get specific targets and other areas, when it comes to stimulus and job creation. whichrget will be 3.6%, surpasses the level in the wake of the global financial crisis, boosting infrastructure investment, especially when it comes to technology, with a big focus, half a trillion dolla

china for the global pandemic. there's more and more talk of a cold war between the u.s. and china. at the same time, chinese and american officials talk of creating favorable conditions for the phase one trade deal that could help stabilize the relationship. and so mr. premier, are you still confident that more economic reforms and concessions of china can adequately address america's concerns, given that china's economy has been weakened? or, if efforts for cooperation fail, can china's economy withstand the threat of a cold war and decoupling? thank you. chinese]ing >> [speaking chinese] it is also harmful to the world. >> well, it is true that at the moment, china-u.s. relations have encountered some new problems and challenges. this is a very important bilateral relationship. both countries are permanent members of the u.n. security council. there are many areas where the two countries can and should work with each other in tackling both traditional and non-traditional challenges. there are also extensive exchanges between the two countries in the economic, trade, scientific, t

u.s. andeen china, that coming from capitol hill yesterday. the u.s. passed a so-called uighur bill referencing the treatments the d of muslim minorities. are we expecting the npc in china to address this issue today? will we see a chinese official response? tom: possibly. i think it is unlikely the an hour'speaking in time, will directly address this uighur bill, as you say. what we have seen is both the democrats and republicans taking a bipartisan attempt to push through this bill. they have done that successfully. it will end up on president trump's desk. he has not said if you will sign off on it or not, but if it becomes u.s. law, there will be sanctions imposed on chinese officials over these human rights abuses. that's the way the u.s. characterizes it. the camps are educational facilities. certainly this is a sensitive issue for china because it speaks to territorial integrity. it is a border region of china that is very volatile. for the chinese, it is very sensitive. what you will get for the next half hour delegates voting on the security of

u.s. and china. well you know brant the chinese can read polls in the polls say that the angry orange man is not going to be there after november so clearly if you from china's perspective throw a bone here i mean number one number 2 a by the way before we had the penn demick they had their swine flu and i lost about 70 percent of their pigs and poultry so they need our poultry at the same time we have too many pigs that we can't deliver so this is about the the nothing is nothing concession i've ever heard this is geopolitics at its best chinese plate much better than we do because there are strategic will they have one tactic you get a tariff you get a tariff well guess what chinese just one this one this little round all right now but i want to i want to hit on this as well with you know amid the pandemic that we actually anticipate both sides will adhere to the deal and more importantly with the economic situation worldwide is there any chance of phase 2 coming in the near future as early who hol

u.s. and europe, but definitely in china as well. singapore is one honorable if these tensions between the u.s. and china continue to go in the wrong direction. how is the path expected through the end of 2020? michelle: during the press conference earlier, with the number of ministries on the line, they talked about two major factors they are looking at. the first being the risk of further infections they noted in second waves and some other constituents. they are also concerned that in the u.s., even as they reopen across the patchwork of states, that it will be an even and wrote -- and won't immediately drive consumption in the u.s. because of labor market woes. is a highs everywhere concern. it's something of concern in singapore. that will be the theme of the stimulus that will be rolled out today by the deputy prime minister. the global economy factor they are talking about is the policy stay. that's all about the fiscal and monetary measures that have been unveiled. others don't have as much space as singapore does and a that

u.s.-china trade dispute, we saw a fall in u.s. example, in those ag products and proteins being impacted in terms of australia, but saw a pickup in sourcing out oceania andrica and i suspect the product will still keep moving but we need to adapt r equipment of entry and capacity on the deep heef sea markets even if the origins still change. >> ocean network express c.e.o. we will look at the drive to find a covid-19 vaccine. up next, we are looking how the coronavirus pandemic has affected global auto makers. this is bloomberg. ♪ >> quick check of the latest business flash headlines. elon musk is demanding his factory stayed shut because of the coronavirus. musk will restart his production tweeting if anyone gets arrested, i ask that it only be me because the only u.s. plant has been closed since march 23. steve mnuchin weighed? . working casting doubts with leapeders to avoid bankruptcy and may not have enough to pay bills. fourth quarter loss was $1.92 and $1.11 seen. coronavirus stalls auto demands. states are warning it is wor

u.s. and china you have just outlined. the question is how much of that negative view is already in the price? a lot of people have said, look, risk assets are looking negative through the stimulus on the others. are they going to continue to do that in may? friday did set us off to a good start. more than a 2% drop in the s&p 500. japan closed, but generally read on the screen in asia. u.s. futures point to another down day. europe closed on friday. we are seeing european futures down more than u.s. futures, reflecting that catch-up. treasuries trading. futures to just we could see the 10 year yield slip. the yen is one of the g10 currencies gaining against the dollar. you are seeing oil snapping a three day rally. the expectedraised death toll in america to as many as 100,000. also promised, he a conclusive report from the u.s. government on the chinese origin of the coronavirus up rig. he says beijing has misled the world. for more, let us go to beijing, where tom mackenzie is standing by with a global coronavirus wrap.

u.s. and china. there's a question over whether the phase i deal is off the table come whether we are going to see the u.s. take azure's that increase sanctions or tariffs on china. how much are you worried about that uncertainty, that lack of clarity on the u.s. response and what china will do in retaliation on u.s. businesses? we very much supported the u.s. administration's effort to address fair trade actions through a trade negotiation. there were some issues not addressed in phase one like subsidies and state owned enterprises, etc. weever, we belie the -- believe it provided some stability. china has not provided all of its obligations under the agreement. this will be another issue. but i think that the negotiations between china and the united states on the trade front has been, to some extent, isolated from the broader political challenges in the relationship, and that is a good and. we want to see china and united states work through these issues because it is better for the global economy.

u.s. and china, and obviously when u.s.ction year, the candidates will look whatomeone to blame for had happened, how it played out, and what was shared in terms of information and so on, and we are seeing some pretty sharpening tone coming out of the u.s. this week. we will hear later this week from the president what exactly the measures are that are going to be taken as part of an and emerging perhaps cold war on the back of the coronavirus. this will have an impact on markets for years. right here right now, it is more important that we come out of the crisis that has been triggered by the virus. francine: yesterday our question of the day was trying to figure out why there is such a divergence between the real economy and financial markets. do you see this divergence dotinuing, or at some point they match up? michael: i think this divergence can carry on for quite a wild, but it is also important to know that you cannot just link the fundamentals one to one. markets look forward. they are nine to 12 months down the roa

china. emily: u.s. intelligence has concluded that china lied on the extent of the coronavirus outbreak there. do you believe that? if so, is that grounds for a more contentious relationship with china? access ton't have intelligence anymore but i have believe -- an authoritarian regime like china might not be likely to be as forthcoming as they might be. china, they certainly were not very clear only covid crisis, but clearly some of this is manufactured by both sides and i think we are getting into difficult territory. emily: let's talk about the huawei curbs. huawei has said this is pernicious, arbitrary. what do you think? is it unfair? huawei is a bad actor. there is a lot of intelligence suggesting they are close to the chinese military, chinese intel. this really seems to be designed to put huawei out of business. many semiconductors rely on china and huawei, so this has a huge impact on our own industry. i don't think the chinese are going to take this laying down. they are already threat again t

u.s. and china. jinping,president xi they are focused on the longer-term trajectory of the country and staring at in the direction they think is needed to get china back to the position where it is a dominant power. they are looking to 2022, the coming unionist party conclave -- communist party conclave. xi jinping wants to make sure he is in position to continue as president of china. there are no signs they are going to back down on core territorial integrity issues like hong kong, taiwan. these are simply immovable as far as beijing is concerned. you have president trump backed into a corner over what many would say is the mishandling of the coronavirus in the u.s. by his administration. he is lashing out at china. he had hoped to talk about the success of the phase one trade deal. one thread that binds these two countries but that is looking wobbly. we expect the trump demonstration to ramp up these attacks. this is a bipartisan issue and you are seeing that in congress. even if it is not trump

u.s. and china. that would hit u.s., similar to yesterday, but right now we are seeing tiny moves. the nasdaq actually up 1%. that tells you investors are not concerned over all about rising u.s.-china tensions. there is a china index, the golden dragon china index, down 3.4% today. this is filled with chinese firms listed here in the u.s. sharing the conversation with speaker of the house nancy pelosi from yesterday, talking about that bill passed by the senate to delist foreign companies, presumably targeting some of these chinese firms. investors taking that seriously with that index down sharply. u.s. stocks remaining flat with bonds remaining higher. david: what about commodities? what about oil, for example? news coming out of china often affects oil. abigail: that is a great point. copper is down, too. oil have been up six days in a row. down sharply today. down 3% right now. commodities are off of their lows. also a commodity that is moving. those traders getting out of that risk asset portion of that trade. i'm

u.s. and china? what does it mean for markets? toos: i try not to worry much, but it is a concern for market. s. we have a reemergence of tents narratives bilaterally between the u.s. and china, and more broadly between china and other countries. s atralia is applying tariff the border there. we may have seen after the phase one deal, that we could put these trade tensions behind us, but that is not the case. more broadly on a secular basis people have been expecting this anyway. what we have learned from the coronavirus is supply chain costs, minimizing costs across leads to vulnerability, and maybe there needs to be a rethink to that model. know china -- we have seen that with the passing of this bill. to be seen as soft on china going into the election in november. the combination of all those suggests these skirmishes and trade tensions will be with us. it is a negative for markets, but i do not see it as a huge negative especially when you see .he damage from the virus we should be more concerned how we deal with that and the

china. only if europe and the u.s.ng to really risk the overall relationship over this, then more decisive measures could be take in. manus: let's see where the offramp is or the escalation. , director of asia programming. coming up on the show, lift sounds as 9 billion euro bailout is boxed down in talks in brussels. more on the story. this is bloomberg. ♪ manus: this is "bloomberg daybreak: europe." i am manus cranny in dubai. lufthansa's 9 billion euro bailout has been bogged down in talks with brussels. horses tell us the discussions are meant to ensure swift approval once the deal is finalized. our senior editor, benedikt kammel, is on the line. great to have you with us. lift on this set almost one week ago that they are in advanced talks about this bailout. what exactly is holding it up in brussels? benedikt: the devil is in the detail. on wednesday week from the chancellor, from angela merkel, that they are on the home stretch for the deal and looking to confirm as much. we really thought this is a matter of a

a look at spreads between china and the u.s. ten-year, over 200 bips. k china has appetite right now for a much weaker currency compared to that appetite it had last year? it pulled it back. khoon: i believe the yuan has further scope to weaken and i believe the chinese authorities will allow this weakness because i think they have shown us they are doing the trade war. they are very open, and in fact, very willing to allow the yuan to weaken in order to help the export sector cope with the tariffs last year, and of course, this time around, with escalating u.s.-china tensions, plus the export markets for china has pretty much collapsed. that requires further weakening and the yuan in order to assist the export sector and help the economy recover. i believe authorities will be very open to that. they will not allow the currency to be too volatile. so it is more of a case of allowing a managed depreciation rather than an unruly, volatile market. as you alluded to, a lot of these export markets are not fully open as well. china looksorrect, to aggressively

u.s. and china. president trump ramped up rhetoric against the country, suggesting that xi jinping is behind a disinformation and propaganda attack on the united states and europe. kevin really joins me now. overnight --atest kevin said really joins me now. cirilli -- kevin joins me now. he suggests there is a disinformation platform to try to discredit some of the reports coming from europe and the united states related to the coronavirus. in addition, the president also making claims that he believes seeident xi is desperate to former vice president joe biden beat him in november in the u.s. election. would make.ints i secondly, it comes as the president is really increasing his efforts to increase the rhetoric against president xi, but also as lawmakers on both sides of the aisle are suggesting that there might need to be some type of policy coming out of washington in order to go back against china. a host of different rhetorical increases over the last 24 hours. it comes as other chinese officia

u.s. and china. there was a new security law that some are saying could take away a lot of rights from hong kong, as well, the u.s. passing a bill in the senate that could delist chinese companies listed here in the u.s. if they don't follow accounting rules. u.s. and china stocks would seem to be underperforming, but those chinese companies listed here in the u.s., like the golden dragon index, are still the winners. year but certainly much better than the losses we see in the other averages. that is an index we have been tracking closely this week. of thelook at some manufacturers, in particular, boeing, cat, ge. we had earnings from deere, better than expected. not really impacting other industrials. manufacturers are concerned about those trade tensions. 1:00,y, it is friday, which means we get that baker hughes rig count data. unchanged at 79, but the total rig count is down to 237. total count at 318. a drop that you are seeing is not enough to drop some of the oil producers that are heading low

u.s. tech, china and the rest of the world tech, access to capital. e narratives we saw be put on the table last week. u.s. tech would be left in a much more robust position. theuote colin reinhardt -- pandemic is the last nail in the coffin. access toto consider capital and u.s. policy in that regard? eleanor: i would say that tech is an extremely wide sector so it depends on what tech you are referring to. if there are going to be limitations in terms of capital and the ability of manufacturing happening in china for some western companies, i would expect a lot of that to be replaced by korean or japanese players which would be more detrimental to u.s. tech then perhaps is the desire of some of the regulation beginning muted at the moment. considering whether chinese companies could -- is problematical but i would think it is also not taking into consideration the amount of capital which is available in other parts of the world and indeed in asia. again, it seems to be strong effecge which may have ts which are not being soft at the moment -- sought

u.s. and china. stocks are still climbing, markets are first looking at the u.s. seeing how bad the relationship between the u.s. and china will actually be. oil slipping, oil and treasuries higher, they are focused on relaxing the lockdown. contracts on three american goodie gauges pointing to a former open they are wall street. china's run also slipping. bloomberg surveillance continues in the next hour. we will be talking to steven major from hsbc, plus we will be joined by jim o'neill of chatham house. this is bloomberg. ♪ francine: controls on transactions and freezing assets on officials -- the u.s. is considering this to punish china for its crackdown on hong kong. hundreds gather in the city to demonstrate amid a heavy police presence. jamie dimon sees good odds for a rapid u.s. rebound. the e.u. commission presents its recovery plan today. the ecb is committed to addressing market fragmentation. and twitter adds to a fact-checking label two tweets from u.s. president donald trump for the first time. he accuses the social media giant of stifling free speech

u.s. and china -- rising tensions between the u.s. and china. joining us is bloomberg's james seyffart.one tf higher right now. what is it -- one etf higher right now. what is it? james: there's different ways to slice and dice these stocks. all of these make it very difficult, and different etf's have different exposure to different types of rocks. holds stocks traded on hong kong in hong kong, and that is down 2.3%. e -- from ishares,, holds stocks in hong kong, and that is down the lowest. guy: goldman sachs just launched their first set of core equity beta products in the united states. walk me through the pricing of these. these core beta products, are what most people tend to think about when they think etf's. they are supercheap market beta exposure. you slice them into different areas. u.s. equities, international, emerging markets. goldman just jumped into the sandbox, and it is a big deal. they priced pretty far above where they expected. we expect them to press very cheaply. bny mellon also launched recently, and they have a couple of etf's that are zero. we expected goldman

u.s. and china?more of a sideshow or a new phase in the relationship they could spiral out of control? steve: i would not call it a new phase. what the covid-19 pandemic has done is accelerate significant trends that were already underway in terms of the u.s. china relationship. if we think back to late last preceding 24 months, the u.s. relationship with china was already on a significant downturn. right now, what we are seeing is allegations of chinese mismanagement at the early stages of the pandemic. one of allegations -- wild allegations that it might have manufactured the virus as a way of continuing this feud. it plays very well to a u.s. audience. nobody loses votes in the forthcoming presidential elections for being soft on china. as far as investors are concerned, it is going to be a continuation of the feud that has been going on for a long time. --t is going to johnson tate going to concentrate minds in board rooms about where to locate supply chains. just how vulnerable you are if you ha

u.s. likely to respond to china implementing these national security laws on hong kong. well most likely the u.s. will resort to additional sanctions and other forms of economic punishment so hong kong will also be punished the city will likely be downgraded from extensional trade status but the u.s. and this was all and some very heavy financial hits as a global financial companies house there will likely leave and overhanging all of this there are major concerns that china and the u.s. are about to engage in a new round of trade wars now this is the biggest threat to the economic recovery and we're starting to see it unfolding now beijing is preparing for u.s. retaliation by doing literally the one thing that in theory it's president trump more than anything devalue the currency the pvc fix the r. and b. at $71209.00 monday which is the weakest fix since 2008 so while u.s. markets are closed monday in observance of memorial day asian index seems close flat as property stocks and real estate developers in hong kong and mainland plunge up to 8 percent are doing quote i wa

u.s. and china over hong kong where the strong words from the u.s. secretary of state. so saying the u.s. stands with the people of hong kong is they struggle against the chinese communists their party where do you think that leaves china u.s. relations which of course have been strained are for a variety of issues most recently coronavirus well this belongs been wrangling in the trumpet ministration with regard to its policy towards china might pompei or even before he was secretary of state was very much a china hawk urging stronger action against china now in recent months the trump administration continued to maintain that its trade links with china were crucial that the trade deals that it was formulating were very important to both countries economy might bumppo throughout that period was insisting on stronger sanctions now the situation with hong kong is quite simply the secretary of state has to certify at least once a year that hong kong is autonomous from china now without that certification to congress then hong kong is regarded literally as part of china now

u.s. and china remain high? >> i think it is probably the markets have an ability to separate the deterioration in the political relationship between the u.s. and china and the economic relationship and for example if you look at the april data, it just had some release, it shows that the chinese were buying significantly more pork and were starting to buy gas from the united states. they try and make their phase one agreement quotas. while i think that might be mistaken, i think that is an important element of today's rally and then the second thing is the background of liquidity and the global economy and this process of reopening across the world. you were talking about at the top of the hour, i think that reassured people on a global basis. matt: we were talking about the u.s.-china tensions. some have likened them to a cold war and your question of the day pertains to that. how best to trade china-u.s. cold war. what is the consensus mp is the u.n. the best way the trade it? >> i think the number one choice