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

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

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

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

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

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

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

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

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

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

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

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

gradual reopening as well as the weight of the extraordinary monetary stimulus coming through from the rbnzto watch oil. a bit more of a recovery earlier on in the asian session after the rally that saw prices more than double, stalled the new york overnight on concerns that these staggered economic openings across the region is going to be overwhelmed by the glut of supply that we are seeing. the demand side simply won't rise quickly enough. we are continuing to watch the oil patch. shery: we continue to watch what happens in the coronavirus operate. the latest numbers out of china, reporting no new coronavirus deaths. when it comes to symptomatic coronavirus cases, six new asymptomatic cases. two additional coronavirus cases in china from a six. all of this playing into the markets. a little bit more stabilization in china. for more on the markets, let's bring in our mliv strategist on the phone. let's start with japan. it is reopening, catching up to that selloff we saw worldwide. the japanese yen, a little bit of pressure. while japanength was on holiday. mark: as you mentioned earlier,