ear the pboc is preparing for more action.ill reach for aunt -- unconventional tools. china open remains one of the few major economies implementing normal monetary policy. they are concerned about inflation. they are saying that the economic fundamentals remain in place. they is saying that they're going to could try to contain those financial risks. becomingncing act is more acute as the international slow down becomes more acute. and we look at the real possibility of a very big global recession. seen economists say they expect additional measures from the pboc. reserve ratios and further drops to the loan prime rate. we should look ahead to may 22, when we get the national people's congress. we may get more details around policy then. and more support for the economy which remains under pressure. the pboc is prepared to step up. haidi: tom mackenzie in beijing. thank you. next, hong kong seems over the worst of the virus. the china protests are making a comeback. a look at what that means for the property sector. this is b

haidi: yet the pboc's actions -- shery: yet the pboc's actions have been measured, compared to its global argument against cutting? tom: everyone agrees another cut is needed. it's a question of time, weather today is the day, or we wait until after the nationals peoples congress that gets underway. citigroup is one of those houses that is stepping up and saying "we don't think it will happen until after the parliamentary session." they point to the fact that the recent credit data suggests the monetary response has been affected. we saw the increase in financing, the jump in new lows. it's more likely any cut comes after the mpc so it is more aligned with policy announcements at that key gathering of chinese officials. i think we don't get a cut today. expect the bond market to throw somewhat of a tantrum. up if will likely move the pboc disappoints. in terms of the economic indicators, that pain is there. you saw the price inflation. consumer inflation, as well. you hear from china's finance minister saying there have been significant hits to china's fiscal revenue. expect the debt targ

pboc proposing?message from the chinese central bank is it is prepared to step up its support for the economy. we are talking about the quarterly report published on sunday. the pboc saying it will pay more attention to economic growth and jobs. the impact really eviscerates the global economy. the central bank saying the prudent monetary policy will be more flexible and that liquidity will be kept at reasonable levels but the report dropped an previous pledge to avoid excess liquidity flooding the economy, suggesting may be the pboc is giving itself more room to maneuver, and it may well need that additional space. the global economy has slipped into what the pboc called a recession track and mourn the impact of the virus may end up being more damaging than expected and other central bank's have limited policy tools. unconventional monetary policy, things like qe or negative rates, seems unlikely for the pboc. the central bank saying china will remain one of the you wager economies implementing what

the pboc has refrained from doing open market operations.said that must mean on thursday, they are going to come in and do mediumng to get the lending facility rate down. in fact, they didn't. they didn't change the amount of what they rolled over. it was another signal that they are not ready to move yet. people are expecting them to let and drop down about 20 basis points but they kept a neutral position. another thing that set people up for this was the monetary policy assessment report that came out recently where they talked about more powerful using, sliding rates lower. now, some are expecting a move may be as soon as tomorrow. let's step back for a minute. now china is facing right is is millions of people who are so out of work. industrial production, retail sales, which have been weak recently. this is another reason why people are expecting the pboc to make a move like this. it is a lesson that central banks and governments around the world are watching. many countries now at these high levels of unemployment rate, people who have

the pboc said it will pay even more attention to jobs and growth.hey said avoiding excess liquidity floating the economy is missing. it was in the previous report in the fourth quarter of last year. hong kong police arrested 10 people and fired propellant sprays as people attempted to rally in calhoun. together in defiance of social distancing measures. local media said police fired pepper balls. two teenagers needed medical attention. 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 am karina mitchell. this is bloomberg. shery: medley global advisors managing director says australia is among the markets in position -- we will have more. this is bloomberg. ♪ shery: u.s. stocks punish on the green on friday and the s&p 500 posted its first weekly gain in three. this despite the biggest loss of jobs in more than 70 years. a quick return to normality could lead to a change in stock market leadership. ben emmons joins us -- ammons joins us now. where can we

the pboc pledges stronger monetary policy. saudi arabia confronts its own predicament with slashing of spending and tripling vat's. the european commission threatens to sue germany. --sident ursula von warm welcome to the show. the agenda has been set. more stimulus from china and japan. negative interest rate policy is exploding across the u.s.. to the market, april fed funds futures for 2021 skirmishing with a negative. according to jpmorgan, you should. there is a big bet negative rates could go to -45 bips in 2021. the dollar, what are the consequences of nirp. therest-rate policy on dollar would be the dollar living on borrowed time according to standard chartered. dissipating.ial is we are rolling over. dollar-yen, more news of more stimulus from china and from abe japan could do more helicopter money if needed. the dollar rises, the yen falls. have a look at the rest of markets. what is the biggest risk of the morning? asian stocks rise on the stimulus discussion, sms -- s&p futures up. but the nasdaq takes it all. let'

david: i want to talk about the pboc now. been discussion and you can tell there are some details about the potential revising of legislation governing the central bank. what do we know? selina: we still have no details or timetable, but the national people's congress has talked about revising as part of its to do list. have reportedly suggested they could strengthen the central bank's role in increasing of financial institutions. the pboc mandate, purview, organizational structure. it has been speculated that some of the duties pboc already exercises will be written into law has statutory responsibility. there has been some in china lobbying to remove the situation that prevents the central banks from directly financing the government but analysts say the possibility would be low. david: great stuff. all things china. selina wang live for us. from beijing, let's get over to new york and karina mitchell is there with an update. karina: thank you. china says its proposed security law for hong kong will not affect justice syste

how aggressive will the pboc be? so far it hasn't shown any signs of being aggressive.arkets want it to be so. helen: you are right. imf rate that compared -- i am afraid that compared to other central banks the pboc has not been much active in terms of easing tools. it is definitely picking up the pace a bit, probably because starting from mid april when data became available, i think policymakers are intensifying their easing measures. for example, from february to mid april, for two months time they only cut lpr by two basis points. generally speaking, a 10 basis points cut in a policy rate is nothing compared to what other regional central banks has done. it is very little. in mid-april, they have cut another 20 basis points. we think they have 70 more basis points to go before the end of this year. hasrally, we think the pboc gradually come to admit that there has to be more policy easing, especially in its more recent monetary report in the first quarter. we see deleveraging coming off, so that is a good sign. haslinda: bank of america's helen qiao, thank you for

that was there in q4 of 2019 but not this time around certainly looks like the pboc is ready to do a little more than previously -- obviously pre-coronavirus. there is another acronym of rates that the central bank of china is tinkering with. this time around it's slf, standing lending facility loans for the month of april that has been cut pretty much across the board for overnight, seven-day and so forth by 30 basis points we're talking about now this time around a shorter term lending loans that are being cut in terms of the rates as well. all this, is this really working in terms of the. boc trying to engineer lending remember the authorities in china have been basically encouraging a lot of banks to give out loans so that small and big businesses can actually stay afloat during these difficult times. if you take a look at the latest figure we got in terms of the liquidity measure in china, it certainly seems that way if you take a look at the new bank loans for the month of april, it actually came in at 1.7 trillion yuan. certainly did come down from the levels we saw in the mon

the pboc seems keen on showing it wants to limit declines.eculation of intervention in the fx market should hong kong dollar at 7.75. the u.s. saying it is no longer autonomous. protests expected over the weekend. theave seen wild swings in hk dollar. the yen trading higher. investors seeking safety. best-performing g10 currency up 1%. resistance level there. route, 14,000, 699. atare looking potentially 6.3%. take a look at where oil is right now. down about 1.3%. 33.29. new concerns of an oversupply. also concerns about a second wave of infections, which could derail recovery. gold futures trending upwards. retaliating china against one another. pointing to a low open. down about half a percentage. ended higher by 1.8% yesterday. it is gdp day. growth slowed in the quarter. 1.6% from 4.7%. the focus on activity, manufacturing and risk. yvonne: looking ahead to the numbers. president trump saying he will announce new policies on china later on friday after beijing passed a national security law curbing freedoms in hong kong. the top economic

markets were expecting the pboc to rollover the funds, or some of them.y 20 basis points after the central bank vowed earlier this week to use more powerful policies. they have not delivered thus far. savings plans for the u.s. federal workers, delaying a move to index with chinese stocks. the move comes after they face pressure from trump and his administration to block. david bloom us from hsbc. when you listen to the narrative about what we expect from pboc, could torpedo the yuan more so than anything else, would that be a fair assessment and your assessment of where the yuan is at the moment? david: no, i think they are click bait. this currency has hardly moved against a dollar that has been totally resurgent against the real, massive rally in the dollar, it -- and one of the currencies that has been pretty stable, that is nothing year to date, is the renminbi. this has been a calm currency and under control. there is no way, this idea that the chinese will somehow weaponize the renminbi. the last thing the chinese want is for the renminbi to be in

>> i think the pboc is doing a graduating -- gradual using trend.g for a room to ease further the next three at a 10ut they might be business point interval the next few months. i think they will conduct more credit easing in terms of accelerateoans and the pace of corporate and government bond issuances. this has been a good support for the yuan in medium-term. likely toard they are lower atne year rate the end of the year. issuance of debt sales pick up, additional liquid easy -- additional liquidities as you pointed out. what is the impact on the bond market? we have seen yields pick up. you see further upside? is room forhere bond yields to go up because of the supply side. we will see more coming through, especially from local government bond issuance. it is replacing shadow banking financing in the past cycles. in terms of structural of credit supply we are seeing more bond issuance coming up. the banking sector was relatively stable and new bonds are picking up. i think we will see a continuation in the rest of the year. at the bigger picture

yuan, theook at the pboc probably suggesting it wants to limit the downside.he yuan tests at the weakest level on record. it is weakening. the pboc expect the currency at the weakest level since 2008. hong kong at 775, pretty flat. one of the highest-rated in the capital. speculators are betting on depreciation. $1.4 billion of options traded on the hong kong dollar today's ago. , theng at where we are yuan at 1238 after the bok cut rates to the lowest level on record. oil down 3.4%. 32 --sing of course near below 32 actually, 31.70. u.s.-china tensions hurting sentiments along with word russia might ease supply. gold futures a tad lower. gold has fallen the most in over a month. the near-term outlook looking bearish with a reopening of economies. here's how it is shaping up in india. nifty futures pointing to a higher open. snp futures also pointing to a higher open. the psychological 3000 level. pretty much positive in the u.s. sobal stocks up about 30% far from those lows in march. get to our top stories. a high follow-up -- china's high-profile political m

we will see the pboc try to limit the client? or will we see a rapid depreciation?nk that it is a little bit of a -- that the pboc might be looking out for. at the same time, given the situation we have particularly given how the rhetoric is aggravated over the weekend, i think there is going to be expectations to see limits. against the u.s. dollar. definitely the situation, the pmi, is globally positive as well. they are worried how the u.s.-china trade tension will i think that is where the concern lies. bit of aas a little wait-and-see to how they might react. if the rhetoric comes through, there is a little bit of this tension brewing. the equities markets have pretty much been well supported by unlimited stimulus. how long can unlimited stimulus provide the support when you see markets factoring in fundamentals which are not looking good? >> i think this is a great question. with regards to how much the government is pumping in over three dollars trillion. really very expensive. markets are anticipating and pricing in -- asian markets across the spectrum of ho

we are the pboc saying they will step up their support to the economy. we are getting this report suggesting you will see further cuts to interest rates and reserve requirements. then there is jobs finally. 9 million urban jobs will be created. that is the target. it compares to 11 million for 2019. the official unemployment rate in china is close to 6%, but most economists say it is closer to 10%. the job situation is dire. it is putting pressure on the communist party. it is a concern for them. they have may be as many as 130 million people in china unemployed or furloughed. to focus on employment growth is a priority for premier leader li keqiang. haslinda: china also made good on its position in hong kong. it said it would push through the security law. how do we read into that? tom: that is right. we heard about this last night from officials at the npc when they were questioned about the issue of hong kong. it seems like beijing is taking a pretty hard line once again on hong kong, trying to bypass the local hong kong government to enshrine a secur

pboc law was passed in 1995. further -- to loss.a wang in beijing with the latest out of the npc. you a check of our business flash headlines in the meantime. air new zealand is forecasting a first full year loss in two decades as they force groundings and staff layoffs. the carrier says it will post an underlying loss in the year through june but cannot provide report guidance to also an aircraft impairment charge of 200 million u.s. dollars as well as restructuring and fuel hedging costs. the german government has approved of a $10 billion bailout for lift onset, putting the state back at the heart of an airline that was taken private two decades ago. the deal gives the government a 24 -- 20% stake. it needs to be approved by the european union and is likely to face opposition from airlines that have not been offered state aid. coming up on daybreak asia, singapore is expected to announce a fourth stimulus package as it looks to limit the fallout of the virus lockdown. we will have all the details, next. this is bloomberg. ♪ david

the pboc pledge a more powerful monetary policy.e ongoing unrest in hong kong will be in the spotlight with beijing looking for a greater role to supervise his politics. ,he u.s. is delaying its report as the white house awaits for word on the management of the virus. watchedgress will be especially closely. matt: china's most important policy meeting is starting tomorrow. joining us now is bloomberg's mliv strategist. thank you for your time today. what do you expect from china? what do investors need to watch most closely? >> obviously they need to be looking for stimulus announcements, and also they need to watch carefully the pboc yuan;.on the you want tarif-- e china will engineer a gradually , and that is what they have been doing in recently . that is something i would watch for. that is not likely to emerge from the congress itself. that will happen side-by-side with the pboc. let me ask you about the dollar. we see in the asian session that it is the choice. it was in the bloomberg markets magazine, different accounts of wh

however, at the same time, we believe the pboc has the capacity.china feels engaged and committed to opening up the market. be sloweds that might down by the pandemic. the trend is there to go into the china onshore market and invest there. to a certain extent, i think it is an issue in asia and china than the rest of the world. tom: we saw the fed setting up the swap lines in the region. what is the dollar situation looking like? are we still seeing a bit of pressure in dollar shortage in the region? ronald: -- jenny: in march, once the problems in asian countries like india, we see the situation has recouped since then, but i'm less worried -- we are more worried about the fundamental data that will be announced by these countries rather than the dollar shortage. yvonne: jenny zeng, thank you for joining us, the cohead of asia pacific fixed-income. crossing mention lines when it comes to the norwegian cruise line. they are pricing their upside 36.3 million shares, out at $11 each as we learn they secured a $400 million investment from the private

and then there is a monetary policy side, the pboc said it can provide more support.ow much fire power they will turn to the economy now. expecting premier li keqiang to say that by abandoning this growth target which a lot of economists have said is arbitrary, it allows the country to focus on things like unemployment on financial risks and poverty elimination. shere are a lot of bowl they have to juggle to get the stability they are yearning for. tom: absolutely. it is something to talk about the balancing act between financial risks and stimulating the economy. is a gross actat that policymakers have had to follow for a number of years. extreme.t much more one clear win for policymakers, it is the efforts to clamp down on shadow banking. we see that as a real game and they want to hold onto that and hold onto the efforts they made in curtailing some of the financial risks even as you get 300%,o gdp closing at something like that. you are talking about the matters that have been made. don't want to lose that. in terms of measures we are expecting on the jobs front,

this morning it is it touch slower but it has not gone down now far, and we are waiting for the pbocwe saw yesterday was the pboc fixed at you want on the strong side, but the market seemed to mostly ignore that. we saw during the day that dollar-yuan start to creep higher throughout the trading session, as people were concerned united states could respond with more sanctions. you have one set already, with that uighur bill and secretary of state talking about hong kong. there could be more in the works. traders are taking up very defensive postures. we are seeing activity the options markets suggesting people see they expect the dollar you want to get higher of the next couple of months and buying options fraud higher price. we are seeing a pickup in activity over the last when he for hours and we expect to see erratic trading tomorrow is the day develops after the pboc fixing. it about one hours time. we also expect another level of shock cannot when it comes to record stimulus from japan. -- a level of shock and. -- shock and awe. >> some describe depends to millis at the biggest

the most recent is china's pboc, which said it will resort to more powerful policies. michael, bloomberg international economics and policy correspondent, joins us now. michael: and credit provision over always growing. china again teasing, not giving us a lot of details. the pboc says it is going to work to offset the virus impact with more powerful policies, paying more attention to economic growth, but they are not telling us exactly what they are going to do. in the quarterly report, they confirmed they lowered interest rates on their emergency funding facility, the so-called standing lending facility, and mentioned their targeted relenting program from very similar to what the central bank is doing in the bank of england -- two what the european central bank in the bank of england are doing. no comment on reserve ratio cuts or on interest rates, its main funding tool, which is what people have been. waiting for. . the credit impulse stronger in april than people had expected. aggregate financing increased by a little more than three children you on -- more than 3

do notice the pboc, they have which isan percent, out of lines with emerging market growth. is more growth for the pboc to a con does accommodate the economy in the face of the coronavirus. escalate.ions leave a weaker yuan, no question about that. they can move to almost 0.2%. anna? matt: what happens to the hong kong dollar peg? does that go? >> that is a great question, matt. place since 1983. it has served the hong kong monetary authority very well. there is absolutely no reason for them to think of something they have been doing really well. they can change the hong kong dollar from being tied to the u.s. dollar to the yuan, but i don't see that happening either. matt? anna: thanks very much. joining usven ram there. about the talking weakness of the you in that would not -- yuam that would not -- yuan that would not improve relations with the u.s., but my cell a few more chinese products. this is bloomberg. ♪ staying connected your way is easier than ever. you're just a tap away from personalized support on xfinity.com. get faster internet speeds with a click. order xf

that gives the pboc room it needs to take further action to support the economy.s is the expectation from economist going forward. another question is whether the deflation from china is exported as it was in 2015, another blow to the global economy. haslinda: especially emerging markets in this part of the world. tom mackenzie in beijing. let's get the first word headlines with karina mitchell. >> global health services are warning of a second wave of coronavirus infections with new cases in south karina -- korea and a spike in the city where it was first reported. hashe other hand, italy reported its fewest new infection since march 4, while france, spain and greece continue to these restrictions. parts of the philippines are to remain under virus lockdown as president deter day says the nation cannot afford a second or third wave of infection. they will maintain a stay at home order. the president did not identify which areas. the manila region has been lockdown since mid-march. meanwhile, indonesia's warning about fallout from the coronavirus amid a capital ex

is it fair to assume the pboc may guide down funding costs and the economy going forward? juliana: we have expected further rate cuts, but it was pretty much expected that the plr would be left unchanged given last week's option. it was pressing off of that. anotherrward, we expect 20 basis point rate cut before the mid-of the year. -- middle of the year. haslinda: what is your take on china's recovery path? optimism.s to be some if you look at all consumption, back to levels pre-covid, but that recovery could be easily derailed by a second wave of virus cases. juliana: right. if we have a second wave of virus cases, clearly that will to that, but the data points we are seeing, a pickup in areas and a sizable pickup in durable goods sales, items.lly and luxury china is recovering pretty rapidly and it is giving hope in terms of what is could be looking like for the rest, but having said that, when we carry out our household survey, which we have been doing for over a month now, there are some considerable concerns about a second wave of infections, so the households are pr

for more policy responses and the international people's congress, but for more details on that, the pboc more powerful set of policy measures, and we are waiting for those details. a trimming of the medium-term that we would be looking at yesterday. that may happen today as well. the retail sector remains on the pressure -- remains under pressure. emily: tom mackenzie there in beijing. of course, we are awaiting the slew of china numbers. we will get more analysis on the chinese economy from guests later on. let's get you a quick check of the latest business flash headlines. the ok tos has won enter china's credit rating market. says it will be allowed to conduct bond raising operations in the chinese market. the news comes as a record amount of bonds are offered with chinese companies and local governments raising funds. tesla is cutting car production in china for the second time this month as competition heats up again in the electric vehicle market. the move applies to the long-range version of the locally made model three, with the price coming down almost $3000. it offsets the reba

sparking a rally in travel stocks already lifted by lufthansa's bail outdeal the nikkei lifts and the pboc vows to continue to support the chinese economy. >>> the bank of france governor who is also an ecb board member says the central bank's emergency purchasing plan needs to be flexible to be effective suggesting further bond buying could be on the way. >> if we can't to guarantee the maximum efficiency, we shouldn't be bound some capital banks should be able to buy more and others to buy less >>> the world health organization halts trials of hydroxychloroquine over safety certains as studies show it increases death and heart problems >>> happy tuesday, everybody and welcome to "street signs." let's kick off with a top story involving the travel sector. the german government plans to lift the travel warning by mid-june confirmed by cnbc sources. the new measures will allow tourists throughout the union, united kingdom and foreign non-eu countries taking a look at travel and looers stocks. massive rally. those shares up. tui up more than 30% bare in mind, you can markets were closed as t

the pboc pledged more powerful monetary policies while the government may further support sectors.he ongoing unrest in hong kong will be in the spotlight, with beijing going for a greater role in supervising its politics. the u.s. is delaying its report in the lead up as the white house awaits further commentary from china on the origins and management of the virus. with global calls for an independent inquiry, this congress will be watched especially closely. scarlet: geopolitics will be in the spotlight as beijing confirms that it would effectively bypass hong kong's legislature to implement legislation for the city. joining us now to discuss that and the national people's congress overall is meredith sumpter, eurasia group head of research strategy. so good to see you. thanks for taking the time to speak with us. clearly there's a lot on the agenda for china's leadership. we mentioned hong kong. we mentioned economic growth targets. what will you be looking at as potentially the most important policy announcement? meredith: i think what we are watching for has largely been confi

china's core inflation readings add to the case the pboc may have to add to a stimulus package.e will discuss next. this is bloomberg. ♪ nejra: this is "bloomberg daybreak: europe." maurice, let's talk about china and emerging markets. factory deflation deepening in april. i know you are overweight emerging markets. is that a bet on china? a lot of people have expressed concern broadly in em that if you get qe funding deficits, you are going to cause outflows basically and capital flight and inflation is going to spike. maurice: that is such a broad question. up,strial production being which makes a huge difference. growth isarkets, the as big as ever in terms of asset valuations. we have a huge valuation. there is an opportunity. quantitative easing to your question, of course the question currently is not the cost of doing quantitative easing but that you have no choice. what they are doing and emerging markets is that a much smaller size than what is in and the west and we don't think relatively speaking that we will see capital outflows. manus: ok, maurice. we will return to

the pboc pledged more powerful stimulus. it could include construction, health claire and 5g -- health care and 5g. with beijing arguing for a greater role in politics. the u.s. is the lang its annual delaying the u.s. is its annual report. with the ratcheting blame game and independent inquiry, this congress will be watched especially closely. it gets underway tomorrow. seesg up, as the fed extraordinary headwinds, we will discuss the bank and negative rates. that is coming up next. this is bloomberg. ♪ francine: economics, finance, politics. this is "bloomberg surveillance ." lacqua in london. let's get the bloomberg business flash. >> astrazeneca has received more than $1 billion to develop a coronavirus vaccine from the university of oxford. they have an agreement to supply 400 million doses and the capacity to make over one billion. it is one of the fastest moving and expects to start supplying doses in september. easyjet is time to resume flights. will apply to domestic flying in the u.k.. it comes as airlines a try to

brings the pboc back into action as well. tom: it really shows attention.mish, thank you so much. we cannot see -- we cannot say too much on pantheon economics. there charts are just phenomenal -- their charts are just phenomenal. with futures up very nicely, all sorts of risk on features. i want to show the tension against that which is gold reaching up to 1750 an ounce. i also know sterling is weaker. the united kingdom has struggled on the virus. on the virus front, there is no question brazil is the focal point globally for the who. brazil is having a great challenge of it and over the weekend, texas saw a great number of cases coming on as well. a lot more good conversation for you. this is bloomberg. ♪ staying connected your way is easier than ever. you're just a tap away from personalized support on xfinity.com. get faster internet speeds with a click. order xfi pods to your home in a snap. or change your xfinity services with just a touch. all in one place. you're only seconds away from all of that on xfinity.com. faster than a call. easy as a tap.

we have seen in the last week with the cpi number that they are giving some room for the pboc to movem a targeted approach to local banks, new loans, to rate cuts, and why not some q. week? china -- the cuts that that could lead to some offshore weakness. they have some room for more action. let's see what that policy action is. ubs saying -- 2021. 5.5%. we will see. .ur guest this morning coming up, a breakthrough plan. angela merkel and emmanuel macron backing 500 billion euro recovery funds. what are the details? is everybody on board? this is bloomberg. ♪ manus: good morning from dubai. it is "bloomberg daybreak: europe." cranny.manus a covid-19gns with vaccine. u.s. deaths top 90,000. president macron with a your covering -- recovery fund. aid must be discussed as loans. fed isell says the prepared to use the full range of tools to support the economy. the u.k. will have negative rates at the end of the year. nejra: welcome to "bloomberg daybreak: europe." we saw a rally in the s&p 500 yesterday, the biggest jump in six weeks. was it more than what powell said in terms of keeping

is for benefiting from a very strong fiscal and monetary stimulus, while the pboc here is restrained,tary stimulus is very measured. so i think the outperformance of shanghai relative to the u.s. is thecular trend, but history does suggest shanghai stocks outperform here. how muching forward, of the market moves will depend on what role the united states and china play on the global stage? because we spoke to an earlier guessed about how while the u.s. is withdrawn from the global stage, we are seeing china trying to expand influence abroad. and now with even more u.s.-china trade tensions, will this also be felt in the market? >> i think so. the twod really is for countries that need to work very closely together -- i think from some of the supply chain especially from the u.s., and starting in 2018 some manufacturers relocating to parts of southeast asia. the tensions's , are already here and over time i'd expect a reorganization of the supply chain. what are your expectations for the delay in terms of what policy measures we could expect, signaling gdp, will they put forward a gdb

a clear sign that the pboc is making sure there is ample money supply going around in china.ning to show up in things like a rebound in car sales and other consumer items. at least there is something positive for china to feed off of. but the risk of a second wave of infections is something that is hanging over all countries, not just asia but everywhere in the world there is a risk. if lockdowns are and it too quickly, we could have a second wave later in the year. that will be weighing on us for some time. it was a risk that with the presidential election, we make it tough talks on tariffs. those things are not an immediate concern but for the ate being, people will look things like money supply on -- to get a better handle on where things are going. expect to hear jay powell pushback against negative rates this week? mark: that has been the message from his federal -- fellow speakers. we had a couple more people speaking overnight and the prasm last week. there seems to be a consensus among the fed speakers that the idea of going negative is really a step they don't want t

that's exactly what the market is bracing themselves for, that stimulus coming out of pboc and chinese authorities in days and months to come back to you. >>> thank you. coming up on the show, the tensions over the drugs and why the french pharma giant was forced to backtrack, after the break. assisting millions of customers across america through fee waivers and payment deferrals, helping people stay in their homes through mortgage payment relief efforts and donating $175 million dollars to help hundreds of local organizations provide food and other critical needs... when you need us, wells fargo is here to help. and its mission is to give you truly transformative sleep. so, no more tossing and turning... or trouble falling asleep. because only tempur-pedic uses proprietary tempur® material... that continuously adapts and responds to your body, to relieve pressure... so you get deep, uninterrupted sleep. all night. every night. the tempur-pedic summer of sleep starts now, with all tempur-pedic mattresses on sale, and savings up to $500 on adjustable sets. with all tempur-pedic mattres

perhaps taking some concern and the pboc thing china's positive economic fundamentals won't change.y had historically taken that you. bond features led 1754. inching up 34, 30. taking a look at where we are for those currencies. dollar index giving up gains, currently of 12 41. it is a dollar weakness story, given the risk appetite we are seeing. fixese yuan, we did see a that was weaker than expected yesterday. china set the reference rate at the weakest since 2008. before we go to break, i want to bring this up. hong kong, take a look at this chart. hong kong looking pretty cheap. discount.st it is nott maybe coming in if you are not still risk. funny more to come after lifting japan state of emergency. shinzo abe focuses on reviving the economy. andave the latest data break down the extra budget. this is bloomberg. ♪ staying connected your way is easier than ever. you're just a tap away from personalized support on xfinity.com. get faster internet speeds with a click. order xfi pods to your home in a snap. or change your xfinity services with just a touch. all in one place. you'r

romaine: how much of a defense do you think we will see the pboc make on the yuan?licymakers have really been trying to tamp down on turmoil. yuan is weakening, but they are not feeding into the weakness. they are kind of leaning against it. see,he markets, as you can believe otherwise, and they have been taking it much higher on the expectation that they are going to worsen. win thin, appreciate your perspective here. will be on the lookout for other currency pairs. was speaking, the white house said that president trump at sign date social media executive order. he was of course upset without social media had slapped some fact-check links to his tweets. the administration will regulate the section 203 shield. romaine: revenue, 37 two 7 billion versus an estimate of 37.05. this should not be much of a surprise given that the company does provide those comp sales. fx., that includes gas and this is bloomberg. ♪ >> we don't want to see consumers, small business, big business come out of this in an indebtedness position that is unsustainable. that is why i think you h

the pboc saying over the weekend, a substantial and consistent inflation in the medium to longer termckenzie in beijing. coming up next, the outlook for oil as saudi arabia orders extra cuts for june. we will hear from the nasdaq senior energy director. this is bloomberg. ♪ haidi: the effectiveness of reopening hinges on how governments, companies and the public about it. thecine lacqua spoke to vice dean at johns hopkins bloomberg school of public health about the proper execution. reopenink the ability to depends more on masks and gloves . masks are stopgap measure. how well they do in this relief is more than they think. the most important thing is the ability to stay away from each other physically. particularly at a cash register to prevent droplets from spreading better than a mask. i think it's possible in some areas to do that. , asases are coming down there are more public health measures in place and as the hospitals are doing better. it has to be done very carefully. >> how does contact tracing work? is it the most effective tool rehab bring up? >> it is a very critical too

pboc with fixing of the rmb. u.s. dollars slightly higher. a mixed bag when it comes to equities.hey will be lifting the state of emergency in tokyo. hang seng, down more than 220 points right now as violence return to the streets over the weekend. spi still looking favorable. lots to look ahead to with pmi data ahead. it from: that is bloomberg markets: asia. bloomberg daybreak middle east is next. stay with us. this is bloomberg. ♪ >> the following is a paid program. the opinions and views expressed do not reflect those of bloomberg lp, its affiliates, or its employees. >> the following is a pay presentation brought to you by rare collectibles tv. mercury dime is considered to be one of the most beautiful u.s. coins produced during the american coin renaissance of the early 1900s. the american coin renaissance started from theodore roosevelt's belief that a country's coinage representatives status

we have suggestions from the central bank, the pboc, which said it will provide stronger --icy responses expect more measures on the fiscal front in terms of support for sectors like five g and education and infrastructure at the national people's congress haslinda: let's dig deeper into the markets. the risk of's -- the risk of sentiment creeping back in to global markets is taking hold. asian stocks were trading following warnings about the for agility of the economic recovery. let's bring in deutsche bank chief macro strategist sameer goel. we are seeing flights to safety but have the direction of the markets changed? sameer: good morning. i think we are at an interesting stage in how the markets are responding to the health crisis. over the last two weeks we have seen growing conviction for the how different policymakers around the world have responded. this is why we have seen what has largely been a risk positive sentiment. we got to a point where it has , in termss clear that of drivers, how the exit strategies from the different countries and economies will work, how, which ones

in terms of the language, the pboc and the government, we will see more stimulus. more hopeful that a stronger recovery in china? itunfortunately we don't see being the stimulus anticipated by investors. they were banking on large-scale infrastructure spending, which was the case in 2009, but i think it will prove disappointing. fiscal stimulus is less than a 10th of what was spent at that time. tensions,political which have flared up again with the u.s. and australia, and also a slowdown in global growth. in the longdent term growth story of china and happy to hold positions, but we are not adding to them. >> not even in those sector-specific stories, like the consumer narrative in china being strong? not to mention we expect more investment in new technologies like 5g? >> it is a good point. certainly alibaba and tencent have proof they are global in nature and are major beneficiaries, but also true as we look at technology across the board, in the u.s., technology has been the driving force. we are seeing the acceleration of digitalization, with more people at h

the pboc gave a stronger yuan fix today, which may have been a positive sign that we are not trying toepreciate the yuan. in fact, we are fighting back against market pressure. yet, the market completely ignored that and pushed yuan lower again. they are in a very risk positive mode at the moment. equities want to go higher across the board. the concerns are the yuan and the situation around hong kong. the situation in hong kong is going to stay heightened until at least tomorrow, when the security bill is expected to be passed. matt: i saw that you were also talking about the european fact thatlan, and the it really could be a game changer. tell us your views. rk: any kind of debt bearing -- debt sharing burden in the eu, if that is agreed, it is the biggest thing that has happened in 30 years in europe. the hope of the 2000's was that , the euro zone eventually be forced to do a fiscal union. but we, it survived, never solved that problem. heightened in be the recent years with the debt crisis and the german legal verdict. suddenly, we have a proposal for debt sharing. i know there a

in response to a lot of talk about stimulus, we have had talk from the pboc and china, policy coming through in india. lots to think about in asia. also thinking about the european context. we will look to where all of that conversation goes. that expectation of fiscal policy doesn't seem to be underscoring the positive move in equities. reopening gradually, very gradually. economies with a positive effect. let's get the first word news update. the european commission is threatening to sue germany challenging the european central bank policy authority. on eu law isd always spoken by the european court of justice, adding eu law has premises -- primacy over national. infringement proceedings against germany are possible. we speak to the lawmaker later this morning. pence united states, mike is self-isolating after his press secretary tested positive for coronavirus. everyhas tested negative day according to a spokesperson and he is not in quarantine. he plans to be back at the white house today. the worst may be yet to come for u.s. on employment. that is the warning from neel kashkari

see a liquidity injection from the pboc after a hiatus of 70 something days. when it comes to the sing this a we are seeing little better for the currency today. the dollar is on the back foot. we will probably need to go even further and also, oil reversing yesterday's losses. we see brent close to $36 right now. karina: summoned by prosecutors into alleged accounting fraud in the 2015 merger of two affiliates. the call comes days after he publicly apologized to the villa scandals around succession. we will ask about any legal action during the industries. the road health organization has temporarily halted tests on hydroxy clerk quinn. it is covid-19 drug files. members suspended work after the magazine said president trump members is increased -- medicine hydroxy clerk when that president trump trotted is bad for you. revisingnment is now down its forecast and expects a truth -- a contraction of 1%-4%. final estimates for the first of 4.7%gdp show growth from the previous three months. that is better than the 10% drop that was expected. the european central

we saw the pboc since 2008, weaken is that suggesting that it is open to yuan weakness to provide supportor its export going forward? helps thef course it domestic recovery, if indeed the yuan is allowed to weaken. but it is also quite interesting back, although the daily fixing has been rising, it is very difficult to say whether the market is really long at this point. it is all quite possible that there is a lot of and of month hedging coming from the corporate site. the movements right now. , the risk to the dollar you want at the upside. haslinda: what is your take on the dollar? will we continue to see dollar strength going forward? now all ofll, right the positive moves have already been priced in. this would require a lot of -- a real resolution with regards to the reopening of the economies for the dollar to ease from here. having said that, it's very rangy. what's happening is that, in new york time, dollar goes down in that goes back up again, but asia is back online. but as far as asian currencies are concerned, it's not clear whether it's just the dollar move. right now, the

the pboc has pledged more powerful monetary policies while the government may further support sectors care and 5g,. on the geopolitical front, the ongoing unrest in hong kong will be a spotlight with beijing going for a greater role in supervising politics. the u.s. is delaying the annual report assessing the financial hubs autonomy in the leader. as the white house awaits further commentary from train on the origins and management of the virus, with a ratcheting blame game and global cause for independent inquiry, the congress will be watched especially closely. some headlines out of thailand. the cabinet is mulling a rescue plan for thai airways, the national carrier. that was a comment to reporters. we know thailand has grounded 69 aircraft out of 82 until may 31. not a new problem for airlines across the world. theynments have maintained will stand by the national carriers and do whatever is needed to ensure the national carriers survive. just going to indian markets, settling down into the negative side of the column. we have declines, 7/10 of 1%, a little movement on currency. t

the pboc has pledged more powerful monetary policy and the government could help construction, healthe and 5g. the ongoing unrest in hong kong will be in the spotlight with beijing arguing for a greater role of politics. the u.s. is delaying its report assessing the hub. blame game andng calls for independent inquiry, this congress will be watched closely. haidi: as we count down, australia is waiting for a call back from its late -- largest trading partner. tensions between the two sides after calling for the origin of the coronavirus. fromext guest joins us canberra. there is no doubt anyone was arguing there should not be an independent investigation into the origins of the virus. and you see these states support e.u. andgside the australia, but why did canberra take the lead? >> that is the question i am asking as well. it makes instant -- it makes that canberra led the charge, quietly wishing the u.s. had done it instead. haidi: has it been a bullish thing to do given the reliance on china more than ever in the aftermath of australia's own recovery? >> is thanks to the difficult

there will be a lot of pboc his -- a lot of empty boxes.way too retail real estate out there, and you're going to have to see some big problems as a consequent. -- as a consequence. --x: if i go into a store actually, if you were going to start a store today, a brand, a company in retail, what would it look like? what would you sell? who would you hire? gerald: it seems obvious, but first of all, i would have a major online presence. look at the sales report that came out today from best buy. over 100% growth in same-store sales online in their internet business. similar garish growth in online sales at target. similar thing at walmart. so you better have really good online business. maybe try to fix some of these brands that i have toyed with that are in trouble out there. put them together and make a big online play of all of these brands, and really have something that adds up to something meaningful. the stores he would have, i think you want to go to more engineered pickup locations as opposed to places that you browse and touch everyt

pboc: when it comes to the in china what we see more reductions?eek. we know already the rate has been reduced in april. when will those cuts slow into the real economy? that is an issue and a challenge we see not just for china, but for asia. on the rates front, we see more cuts. that said, most of the policy theng burden will come from 50 -- fiscal policy side. if we look at what policymakers have done in china, they seem to rely more on fiscal policy easing rather than the monetary policy front because of the private sector. the gdp has really risen in china. policymakers probably do new -- do not want to be excessive on that front. just over the weekend we have also seen policymakers to efforts to 14.4% of gdp. listing on the policy side will come from the fiscal policy. shery: we are headed for the launch of the national people's congress this week. what happens to the gdp growth target. if they decide to drop it given the unusual circumstances around the pandemic, how will this guide officials and what they should do over the next year, given

what does the pboc do ahead of that to create some kind of stability or whatever?ian: i think what it comes down to for china is, with the market has been waiting for is stimulus, and some color to the extent that they will be injecting stimulus into they are economy. i think that is why you see china yields rising here, while the rest of the world sees negative yields and yields falling. u.s. treasury yields are down to the lowest levels on record today. for me, that is kind of in focus. i have to just take a step back and say china's debt to gdp is going to rise above 3%. 2005,en't seen that since so it is at a dangerous stage of the recovery. that is really going to catch everybody's attention, and we are going to see how quickly they can turn the eggs around. my guess is they are going to it announce a lot of stimulus package at the end of the week, so let's see what sort of aggressive policy stimulus we have in store. alix: and let's get to some news on just this exact point. according to state tv, china says they will strive to achieve full year economic deve