Transcripts For BLOOMBERG Bloomberg Markets 20240713

And infections surge around the world with outbreaks and 65 countries. Withe a 50 jump in cases 34 people know dead. Well, what a day. Take a look at markets right now. Lets start with bonds. Were going to take a look at the aussie three year, hitting a record low at. 35 . The aussie 10 year, pretty weak. The new zealand 10 year also slipping. Were seeing yields on bonds falling to levels previously unseen. Barrel. Ude 49 a wti is below 45 a barrel. Lets check in on currencies. Dollargot the kiwi trading like this. Coming in betterthanexpected , 2. 6 . But this predates the coronaVirus Outbreak. Weve seen exports rise in new zealand to 1. 7 . The yen was a big mover, strengthening 3 against the u. S. Dollar. That trend looking to continue. A 54ussie dollar has handle, and that happened after we got those absolutely shocking pmi numbers out of china for february. So, hows that setting us up for Equities Trading around the region today . New zealand up and running and off 3. 2 . We have got sydney futures pointing south by 2 3 of 1 . Oh, and i neglected to mention we got a call from jpmorgan this morning that sees the rba cutting the cash rate in australia by a quarter of 1 . With a further cut in april. That will take us to a quarter of 1 australia. It appears we will be looking at unconventional policy measures in australia later this year. Kospi futures also weaker. So, as you can see, from all of that, investors bracing for more oil after a weekend of negative coronavirus Manufacturing Activity in china falling to the lowest level on record in february. More, lets bring in Tom Mackenzie in beijing. Pmi data way worse than we were expecting. Give us the breakdown. Ruly ugly set of numbers. It is the first time the data has been able to factor in what was a broadbased shot down over february in china. We saw manufacturing pmi at 35. 7, a record low, well below estimates from the economists, well below the surveys and significantly lower than what we saw in january 15. And conception and services, another record low, the lowest they have ever seen. 29. 6 for Non Manufacturing pmi. So, very very ugly numbers. It has led to economies to downgrade their growth forecast for china was again. You have the likes of nomura saying they expect to see a contraction in the First Quarter by 2. 5 from the previous quarter. Amz bank saying they expect a contraction of 2 . Vshaped recovery. Pimco says you could be looking at an annualized basis of a drop in growth of 6 in the First Quarter. All this comes down to how quickly businesses and factories are getting back up and running here in china. Youre looking now at about 80 of businesses back up and running, but that does not necessarily mean they are full capacity. Theres challenges around supply chains and getting employees back to work. Paul so, were going to see some more measures from china. Regulators to support businesses. What do we know . Well, this is interesting. This is the regulators for the Banking Sector saying dont downgrade loans from Small Businesses that have been hit by the coronavirus. Give them a bit of leeway. They are allowing some of these businesses to extend their payment deadlines for some of these loans, because they know that these businesses are particularly badly hit. Banks being told wait until the end of june before you start to downgrade these loans or report them to chinas credit scoring system, this nationwide credit scoring system. Its part of an attempt trying to take down these mpls to try and put something of oa floor under the economic damage from the central bank and regulators, whether that is through tax cuts or cuts to reserve ratios, or Interest Rates, getting liquidity into the financial system. Smp global have warned. They said they could reach 6. 3 . They could triple if there is prolonged damage as a result of the virus. That could lead to that 800 billion of bad loans. This is another attempt to ease the pressure on the smes. The banks have to suck this up. Paul Tom Mackenzie in beijing. Meanwhile, europe bracing for mo re fallout as italy saw a new coronavirus cases surge 50 in one date. That brings total infections to 1700. Our rome bureau chief joins us on the line. Just how fast is the infection spreading . Well, experts are saying now the infection may be what they call at the exponential phase. Are no longer growing linearly but transmission from persontoperson is going so fast that we see as we have seen today the numbers rise 50 in only one day. For now they have not been more further infections within italy. Which make up for 1 3 of the economy in virtual lockdown but the rest of the country continues normally, especially the center and the south here in rome where i am now. But we might see more measures in the coming days. The u. S. Has advised all americans to avoid all travel to italy and American Airlines have suspended flights to milan. So, what is the governments response so far . Well, the finance minister has announced today tourism measures worth 3. 6 billion euro s. That is not much, but lets remember that italy is a heavily indebted country. Is already running a deficit. All sort of, there is a deficit limit for euro area countries which must be with other euro area countries, and therefore, European Partners must agree to this. The minister said there is no doubt this be approved but of course, italy does not have a lot of space to stimulate the economy further. Bureauloombergs rome chief, thanks fo for joining usr. Lets check in on first word news with su keenan. Su we start with europe which is facing a new migration crisis after turkey told millions of asylumseekers they can use to escape syria and other warravaged countrys. Greece is the most in has invoked an emergency cause and refused to accept applications. 76,000 people have left turkey on sunday, although it is not clear if they crossed in europe or remain at the border. Police and demonstrators clash in hong kong on sunday is antichina protests. Arrested once again erupted once again. Local media reporting the police are Pepper Spring and one officertrain services were suspd after protesters set fire one of the to one of the entrances. Former Vice President joe biden is hoping his South Carolina primary victory will boost his campaign into super tuesday. As senator Bernie Sanders continues to beat him strongly. It was bidens first primary victory and allows them to stake a claim as the strongest moderate and the one best position to stop sanders and challenge President Trump. Israels Credit Rating could be lower if mondays National Election again fails to produce a workable government. The banks says a review may happen if the vote will the country without a new administration. Israels economy is already under pressure from two Inclusive Elections after the coronavirus infections. While growth is seen widening the deficit. 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 su keenan. This is bloomberg. Come, plentyo more on the coronavirus. Stanford universitys asia Health Policy director will tell us what a pandemic is a question of when not if. Cornell Capital Partner gives us the Market Outlook as we get set for another grim start to the week. This is bloomberg. Paul this is possibly the worst thing ive ever seen in my career. A rate cut is on the table. To thefed will respond threat of the coronavirus by lowering rates. The Central Banks realize that whatever we do they do they will be shown to be ineffective. The fed the policymakers are going to do Everything Possible to prevent the u. S. From going into recession. Lowring Interest Rates is not going to encourage someone to take risk. They will deliver even if they do not see i have no doubt that Central Banks are going to be cutting rates. Because the markets are going to start to have dysfunction because Financial Markets will have dysfunction but they will not deliver a better economic outcome. Weigh ome of our guests ing in on the feds next move amid the coronaVirus Outbreak. Joining us for more is ann ber ry. Thanks so much for joining us. I want to bring up this chat on the bloomberg terminal, a pilot shift in sentiment as discussed by our guests about the fed. Markets pricing in a rate cut at the next meeting. What are your expectations . See. The fed is a wait and att being at mo, if you look other times recently weather has been uncertainty whether it is the trade war, for example, around what the next move is going to be saw the fed being datadriven. That is likely to be the case here. It is a big week for macro indicators and i suspect they will make their decision based on what the facts are telling them. Paul does policy easing make a difference in a situation like this . Money is quite cheap. Is that going to combat the impact of a possible pandemic . Ann it is a big question. What is going to be interesting is to looking at how different parts of economies respond to rate cuts. One thing that has been consistent in the u. S. Manufacturing sector has been weak or unresponsive relative to Prior Experience when it comes to rate cuts. What will be very interesting to track, particularly with the earnings season underway, as what the consumer response to rate cuts will be. If you look at u. S. Economic growth, so much that has been driven over the last 1824 months by the consumer and watching to see the impact of the rate cut on sentiment and whether it can turn to encouraged credit driven spending. And we can see some impacts and that is what we will watch. Marketypically, the bond provides good clues about what is going to happen next. Were seeing the yield on the 10 year cratering. Yields in australia falling to levels never before seen. Ann when it comes to the outlook for sentiment there will gold pricesngs, and treasuries. If we start to see prices come down it suggests stabilization expectations. I think the bond market has shown over the last two years it is not a traditional indicator but definitely one to watch. As we look to see how 60 countries who are now impacted start to respond to the impact of the spread. Paul there has been some confusing signals. Weve seen the threemonth 10 year deepening. What do you believe . Ann we have seen some the confusion, i think, throughout the less two years i think at this point in time what we have learned through a prolonged period of uncertainty, whether it is the coronavirus are looking to back at other big macro shifts in the trade environment, its important to look across a number of different indicators to see what may happen. Some of the traditional indicators have not proven to be as accurate. Couple ofout the next weeks looking to hear what the manufacturers are saying about getting a handle on their supply chains, looking at what the big retailers seeing what they are saying about traffic into their stores. It is no longer about one particular indicator. More about how you look at these different facets to see whether we start the consistency in a direction we are moving in. Yeah. This is probably a good time to get into the corporate impact of all of this but i want to talk about equity prices as well. I am pulling up a chart on the bloomberg terminal. It shows another violent movement. The worst five days since black monday. Where do you see the pain ending for equities . Ann if you go back and try to look at what happened in response to outbreaks in the past, sars being one of them, it was a very different environment in 2003. If you look at that and others across time, it indicates, sars specifically, the s p bounce back up 15 within six months and back up 20 within 12. And you see other health driven operates. In this case, if we looking at a transitory and zogenix shock, you would hope that as enous shock, exog you would hope reduction with stabilize as uncertainty stabilizes you hope to see the rebound coming up. N the markets stabilize that is typically what we have done historically. Paul i guess it is a question of time, isnt it . In terms of the corporate impact we got the prediction from goldman saying zero Profit Growth for the coming earnings season. What are your expectations there . Ann for the next quarter it is hard to see how it could be robust growth. The goldman reports that slowdowns the potential to bounce back up towards the end of the year. The key things we will be watching is the pace at which we are seeing supply chains come back into full production over march andrew able. And through april. We could start to see a big pick in china in february and it is being pushed up to march. We will wait and see how that picks up in april and getting back on track in may. Paul i want to get your thoughts on the chinese pmi numbers we had over the weekend. You do see a return to full production in china, but how much pain are we going to endure until then . It is another how long question, im afraid. Ann exactly. The pmi numbers were not unexpected. Everyone anticipated that drop. It was reported out we would be seeing. I think the pace ias we continue to see things pick up in march. That will be important for the early part of april. If we begin to hear trading partners, we hear apple of the and talking out about stabilizing surprise chains, i think sentiment will start to stabilize. Paul weve heard from tim cook saying it is more a case of ratherng the nobs, than making any wholesale changes. But, ok. I want to talk a little bit about commodities as well. Weve seen a huge cratering in the oil price. Production cuts are they going to make a difference . Ann i dont think so. What we have seen so much and last year or so is so much of the oil price dynamic has been demand driven. As we look to continue to see what the impact is on Chinese Markets in particular and what the impact is globally as a supply chain issues start to shake out, ultimately we have to look at what they are going to be to see where wti shakes out in the coming months. Paul all right. Ann berry, thanks for joining us with your insights ahead of what promises to be a most fascinating week. You can get a roundup of the stories of you need to know in todays edition of daybreak. Bloomberg subscribers can go to daily it is also available in the bloomberg anywhere app. You can customize your settings. This is bloomberg. Paul just getting an alert right now about twitter. Announcing its suspending noncritical travel and events due to the coronavirus. Twitter the latest update to travel policies in the wake of the ongoing crisis. Lets get a quick check of the latest business flash headlines. Speaking of twitter, Elliott Management is said to have taken a sizable stake in 20. It plans to push for changes and replace jack dorsey in twitter. Elliotts nominated four directors to fill any vacancies. Twitterhas 4 of placing it among the top 10 shareholders. China has taken over the running of struggling h a gouroup. The government of Hunan Province has appointed an executive chairman to alleviate the growing threat to the travel industry which is h as main source of income. The Civil Aviation authority and China Development bank are also involved. Abu dhabi is turning to its 240 billion wealth fund to bail out troubled hospital operator. Its considering a potential investment in uaes Largest Health care provider. The ftse 100 company is said to be facing investigation by regulators over allegations of fraud. Abu dhabi is keen to support the companies who shares have been in freefall since december. Risk currencies are plummeting as traders are getting early taste of how brutal the turmoil in markets is going to be. We bring in our editor. Andrea, we are seeing some really heavy losses from the likes of the aussie and the kiwi. We certainly are. Down quite a bit this morning. Also the yuan is down. We had those really poor china pmi numbers. At the same time we have got the yen going up. As there is this race to save harbor assets. Weve also seen australian bonds jumping this morning. Yields are at record lows. They had a very sharp decline this one. Of course, we had the fed s aying they are prepared to step in with an Interest Rate cut. Unlikely to give much solace to the markets, given the fear and the panic we have seen out t here, but we also have expectations that the rba, the reserve bank of australia, meeting tomorrow, that they might cut Interest Rates. Thats why we are seeing the aussie come under pressure and why we see those bond yields with record lows in australia this morning. Paul lets talk more about that rba decision. Coming tomorrow afternoon our time. What are the expectations there . We have had some updated predictions from jpmorgan. Andreea we have. There is a potential that they could maybe cut more than the market has priced in. It probably also comes a bit earlier than expected. G comments makin about a gentle turn in the economy that definitely looks, in jeopardy given what is going on. Yeah, that is going to be the first Major Central Bank and that is definitely going to be one to watch tomorrow. In the meantime, definitely Australian Dollar and bonnie of here and bond yields under a lot of pressure. Potentialhere a we are talking about unconventional measures again . Andreea that conversation is going to come up again. There were expectations that perhaps they would not have to go that far, but nobody really knew the impact this coronavirus was going to have. This is a lot bigger i think than anything anyone expected. You could definitely see the discussion about unconventional measures back on the table in a strong. Paul thanks so much for joining us. Stay with us. Plenty more in a moment. This is bloomberg. Paul it is 9 30 a. M. Monday morning. Looks like a familiar start, futures pointing south by. 6 . Not quite the magnitude we came to expect the past week where we saw the asx into correction territory, losing a lot of ground. We will see what happens when we get underway in 30 minutes time. You are watching daybreak australia. Lets take another look at the markets right now. I mentioned aussie futures. Ooking weaker by. 6 new zealand has been up and running for 90 minutes. Weaker by more than. 3 . The yen is one we are focusing on, strengthening 3 the past week, 107 against the greenback as the haven trade becomes more popular. The aussie dollar one of the movers as well. The shocking pmi numbers from china. Lets get more of what we should be watching as the new trading week begins in asia. Adam haigh joins us. What a trading week it is set up to be. A lot of pessimism around the feds promise of a backstop not offering much comfort either. Adam markets dont know how the fed will respond. The statement late friday didnt provide any information. Equities came off their lows but it was an unknown. The debate around the cycle cut is the heart of the market conversation. Whether or not they move sometime between now and the scheduled meeting later this month and a question around still how much they move, Goldman Sachs seeing a possibility of 50 basis point move. Market pricing now, more expectations for cuts from the fed this year than the three last year. The sentiment is really the thing that is driving it. We are already seeing it on an increased level with the rally in bonds and in australia and new zealand. It comes back to the central bank pricing. Not just the fed but what local Central Banks do and whether you get any more fiscal response that provides some kind of impetus for Economic Growth that is looking very challenged in parts of the world. What we are seeing is the market mechanics and signs of fear growing creuset quite significantly which means exaggerated moves, liquidity moving very fast and the haven assets still providing the main source of comforts. People wanting to buy treasuries globally and the yen. Discussing aere minute ago, the bank of australia is meeting tomorrow. A lot more alive now than it was a month ago. We have got headlines coming from Goldman Sachs seeing the rba cutting 25 basis points tomorrow, 25 in april. Dovetails with what j. P. Morgan has been saying. Gdp growth forecast was cut as well. Now 2. 1 . Best use ofly the the remaining bullets . Adam it is interesting how quickly markets have moved to reprice this scenario now the rba does move which we are starting to hear from economists who are moving in that direction. In the space of a week or 10 days, a fundamental reassessment of how policy will play out for not just the australian centralbank but also Central Banks such as the federal reserve. The speed and the magnitude has taken some people off guard. This chart shows you how much the three year bond yields have come off relative to the cash trade. , notts expecting that building into expectations. The focus returns to quantitative easing and the assessment as to when the rba will step in with those measures because you are going to get so much quicker to the zero lower bound being it a quarter of a percent lower. A lot of it has to do with the global risk we are seeing with the us collation from the coronavirus that took fatalities in australia and the u. S. The economy is already struggling going into this latest factor putting a downward pressure on the growth scenario. Appears to be fairly benign. There is no consideration you get push up in prices. People have ramped down their assessments of Market Pricing and breakeven inflations have come down inflations have come down. All bets are on. Paul that statement will be watched closely. Thank you for joining us. Check out our gtv library for the charts we have been talking about. You can find those on gtv on the bloomberg terminal. Lets stay with the coronavirus. South korea has responded to the expanded u. S. Travel curbs, urging washington refraining to refrain from excessive measures. The nations death toll is a teen total cases 3700. Is 18 and total cases topping 3700. So what about this . Oforter it has been a lot containment of the virus itself but also diplomatic firefighting after the u. S. State department issued a level for do not travel advice level 4 do not travel advisory to the city in south korea which was the epicenter there. They called on the deputy secretary of state stephen begin, asking the u. S. To refrain from taking unnecessary measures. They have reiterated what the south korean government has been doing to contain the virus from spreading further. The south korean government has been hesitant on putting a total ban on chinese travelers coming into south korea. South korea has been approaching this in a strategic diplomatic way where it has been vocal against the governments that have been issuing travel bans. There was an as the on Airlines Asiana Airlines flight that was rerouted from annoying. They have not held by from protesting against this move to the Vietnamese Embassy either. Paul lets talk about this religious sect. There has been a lot of focus on that in south korea. How is it connected to the search in cases surge in cases . What is the governor doing about it . Reporter the Health Minister announced 73 of all of the coronaviruses are coming from the city of daegu alone in relation to this church of jesus. They have proven to be closely connected with the recent spread. The government has asked all of the citizens nationwide to refrain from taking mass religious activities and to replace them with Online Services instead. That is what we have seen a lot of churches doing. This is not just for that church but also presbyterian, christian. So the governments of also issued advisories against protests, mass rallies, taking part in protests that would be in large number and could be connected to another surge in the coronavirus cases. Paul we have februarys trade numbers out of showing a rise in exports more than expected. Is that going to be a temporary state of affairs . Reporter this number actually includes an added on three day comparison compared to the month with the lunar new year. If you look at the average shipments daily, it dropped over 11 . This is huge if you look at the sharp contrast of the Manufacturing Activities in china alone. In february year on year it dropped 6 . The average daily exports to china dropped more than 21 . This shows how the Coronavirus Impacted starting from wuhan, no to korea. Now to korea. It has been affecting the Automotive Industry overall. Paul thank you for joining us. We have another line crossing the bloomberg terminal. Another airline taking measures against the impact of the coronavirus. It Airlines United Airlines Says it will need to cut more flights. Lets check in on first word news with su keenan. Su we will start with the latest on the virus. It has reached more than 65 countries around the world with the u. S. Imposing travel restrictions. The latest was just mentioned, on korea. Cases in italy have been surging 50 . Deaths are approaching 3000. People are trying concern about the virus has led to the cancellation of the major Energy Conference in houston here in the u. S. Appealing and the peace deal between the u. S. And the delavan. The afghan president sets said his government is not pledging to release militant prisoners. Secretary of state mike pompeo, described as momentous the accord that will wind down the war that became the longest conflict in american history. Malaysia has delayed what the Prime Minister had hoped to be a noconfidence vote in the countrys new Prime Minister. Of erson was sworn in as the new leader. He gained power with the support of someone who was in the process of being prosecuted over the 1mdb scandal. Russia says it is ready to cooperate with its opec plus allies to support the oil market. That is even though it is comfortable with current prices. President putin said the alliance producers have established an effective tool. He was speaking ahead of this weeks meeting in vienna where saudi arabia will push for new output curves to meet falling Global Demand. 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 su keenan. This is bloomberg. You. Thank we will get the latest on the coronavirus and how you can protect yourself with standard asia Health Policy director. This is bloomberg. Paul i am paul allen in sydney. You are watching Bloomberg Markets asia. We are going to talk more about the coronavirus. That has spread to 65 countries. We are joined by darrin is the Stanford University director of the asia Health Policy program. We have the World Health Organization warning that the window is closing to contain the coronavirus. Can it be contained . Allo this crisis reminds us of how the world is globally connected, interconnected very whether he goes from epidemic to pandemic, we have to prepare and take steps. Already quite fermentable. Some people say steps have been taken and that has slowed the spread, but it is a new virus. That constrain dashcam strain any that can Strain Health care system. There could be a wider spread including Community Spread which could lead to pandemic. We have to prepare as if it is a once in a century pathogen, although we hope it wont be. Paul can you tell us about the methods that are used to contain the outbreaks like this, including tracing people who might have come into contact with people who have had the virus . How difficult is that to put into practice . Can be very difficult. At the center of outbreak when you dont know what the pathogen is, there has been Widespread International collaboration on the scientific side to get ready for a vaccine and therapies but that takes time. You have tobut that takes time. You have to rely on triedandtrue measures. Many Health Systems are prepared and invested in that. This is like a stress test for a Health System and its interconnectedness with society and economy. The social and Economic Cost that imposes on the rest of ,ociety some societies singapore has a world leading system in Contact Tracing but then they have dozens and hundreds of cases, not thousands. The strategy will have to evolve as the epidemic does. Paul in terms of the way society response, we have seen panic buying in hong kong, australia with his first death, and the media has been running stories about buying of supplies in sydney. Is this behavior rational . Karen unfortunately in a Public Health conference crisis it is people will move from complacency to panic and neither of those is appropriate. We need a scientific but not panicked approach and believe in science and leaders that share information clearly and know that the situation evolves over time. It can change quickly. It might be appropriate for most people simply to invest in and make sure your whole family and contacts and organizations are doing what you should do in any normal flu season. Make sure to wash your hands, stay home when you are sick and so on and then maybe later there would be social distancing, isolation, quarantine as the situation evolves. We know that panic can make things worse. If people buy up the supply of masks and First Responders and Health Care Workers dont have the supply they need, that could make things worse. We need to believe in science be Clear Communication and proactive in what we can do ourselves. Paul is it possible to extrapolate when case numbers might peak, and also i have a question on the fertility rate is the risk is there a risk that could change . This is a new virus. It is related to sars coronavirus. China has suffered the most and a lot of information is coming from there and gathered experience about how to deal with it. We know more about how it is transmitted, but even with the best of information and willingness to share, we might we know morenot know that exactl later because as people have discussed, it is the most severe cases that are usually identified at first and the denominator of people affected that may have symptoms like a cold may not be included. That could change the fertility rate. This pathogen seems to have widespread transmissibility and thanher fatality rate Something Like the seasonal influenza. Those things combined could make a considerable threat. It is important to know that the transmissibility and fatality rate can be changed by the way we respond. We can reduce the transmissibility. And the resilience of our public Health System, supporting our Health Care Workers and having the right equipment and pace for the severe cases can also affect the fatality rate and people. The fatality rate and people. Paul all right. Karen eggleston, director of the asia Health Policy program. We will hear from big voices on the coronavirus throughout the zeman. Including alan he tells us about the impact of hong kongs businesses. 1 30 in sydney. For the latest coverage of the coronaVirus Outbreak, bloomberg subscribers can run vrus go. You can get the latest numbers from the newsroom, analysis of the companies affected. That is this is bloomberg. Paul i am paul allen in sydney. Joe biden has had a dominating win in South Carolina, giving him a muchneeded springboard. Lets bring in ros krasny. Carolinat into south as the favorite. Any surprises here . Did he win big enough . Devina as you know in Sports Betting it is about beating the spread and expectations. Going into the vote yesterday, as highs up 11 points,. S 22, but he won by 30 points he exceeded expectations and it is a psychological boost to his campaign. Since 2000 the winners of the South Carolina democratic primary have gone on to be the partys nominee. That has happened four out of five times. Is a much carolina more populous state. Berniegot ahead of sanders in the popular vote. Tailwinds at his back at this point. That victory give him enough momentum to slow Bernie Sanders down . Going into super tuesday, we are getting into the really rich delegate stuff now. Ros california, texas, big states coming up. We dont know if yesterday is a game changer but it is a shift in the narrative of the democratic race. It seems like in a sense, moderate democrats, more and more over the past week, that they need to get behind one candidate and stop slicing the moderate vote up three and three or five candidates. There is a sense maybe biden is that guy. He has had endorsements today and last night from big names in the Democratic Party. Terry mcauliffe, former governor of virginia, barbara boxer, an elder states woman from california, and even celebrities like jane lynch and people like that. Opinion polls, a little bit all over the place for the voting on tuesday. Cbs shows sanders and biden close in texas. Nbc has sanders will ahead. There are possibly ties statistically in South Carolina. It remains to be seen. One thing we can say is pressure is building on the moderates who are lacking to get out of the race and either to endorse biden outright or remove themselves from the ticket. That would include Pete Buttigieg, amy klobuchar, even mike bloomberg. On the other hand, it is before in, who hasnt done well so far, she is not has not met expectations, she could quit. And she could endorse sanders. Will be determined this week. Will be determined this week. He will see drop outs after super maybe next week it might dropouts after super tuesday. Maybe next week it would be a tw oman race. Paul lets get a check of the business flash headlines. Commerzbank capita group raises its stake in germanys secondbiggest lender. It has also taken a holding in deutsche bank. The u. S. Fund manager has 5 of commerzbank up from 2. 9 before. Top investors include the german government, Cerberus Capital management and blackrock. Lufthansa is starting the sale of international operations, having offloaded the european art of its business last year. The airline will launch sales process in a couple of weeks for a unit that generates more than 2 billion of annual revenue. The offer could attract interest from corporate buyers and private equity. Harley davidson enters a new week and search of a new boss after the ceo unexpectedly stepped down. He ends of 26 year career including five years in charge when the company lost more than half of its market value. Shares suggesting investors are ready for a change at the top. The director takes control for the time being. We will have more on the fallout from the coronavirus. Will be talking to former japanese ambassador to the u. S. For a look at how Prime Minister abe has handled the prices crisis. Nextis all ahead in the hour. This is bloomberg. [ fastpaced drumming ] [ fastpaced drumming ] good morning haidi . Shery japan and south korea open in an hour very welcome to Bloomberg Markets asia. How top stories, markets are shaken by virus fears and chinas pmi plunging to a record low. The aussie and yen weakening. The central bank could be forced to act quickly. Qe could be on the horizon. Shery the brakes now in 65 countries. Rise with 34 people dead. Haidi take a look at how we are shaping up in the markets. It is a brandnew month after february ended with that sell. This is how we are faring. The selloff continues, risk aversion playing out with the increased concerns about the global spread of the coronavirus world. The we are seeing downside in the first few moments of trading. In australia. 4 lower. We are seeing new zealand off. Look at that, world. We are seeing downside in 3. 3 . Nikkei futures looking negative as well. 2 lower. We are seeing the extension of the bearish feeling over in the u. S. We are getting news when it comes to australia with the house prices for the month of february. A jump of 1. 2 , extending the turnaround we have seen since the middle of last year. But is seen as one of the main hurdles that is seen as one of the main hurdles for the rba. They will meet tomorrow. There is not much expectation but this morning we had j. P. Morgan calling for a cut tomorrow and another next month saying be prepared for 50 basis points in one meeting. Rbaman sachs saying the will cut by 25 basis points, another 25 in april and cutting. He gdp forecast oil is falling as much as 3. 2 . 43. We see the virus hitting Global Demand, shutting factories, schools, flights in canceled. Out. E are not going opec will have to do something solid when it comes to flooding those output cuts. Seen like we will not get any growth in oil demand which has only happened three or four times in the last 40 years. Turmoila more market and destruction after a weekend of negative news. Cases continue to spike. All around the world. Lets bring in Tom Mackenzie. The pmi, it was so much worse than what markets were expecting. Tom this is the first set of official data that has factored in the full impact of the coronavirus in terms of manufacturing. Really the forecast, the estimates have been this would fall into contraction quite heavily. The number came out on saturday and it was far below the forecast. It was a grim reading. Record lows for the manufacturing number, 35. 7, down from 50. The lowest print ever for nonmanufacturing pmi. But surprisingly it has led to the economists to revise not surprisingly it has led to economists revising. You could be looking in the First Quarter for a contraction of 2. 5 from the previous quarter. Looking at 2 . They say dont expect vshaped recovery. This is a targeted approach. No vshaped recovery. A drop of 6 . S Goldman Sachs thinks things will rebound in the second half but a lot of it will come down to how quickly factories and businesses get up and running. In a survey of middle to Large Companies that are 8 back and running, that doesnt in they are at full capacity. The supply chains getting employees back to work but this was an ugly set of numbers. David shery authorities in china shery are trying to support other parts. We had the banking regulator coming out and saying mediumsized lenders should allow them to do that and not downgrade those loans. They should a report those loans to the china wide Credit Rating system, not until the end of june. It is another step from regulators to ease the pain for sme. You have liquidity injections into the markets, tax cuts. It is part of that broader support measure being pushed through by regulars and officials. S p says, if the virus impact continues, you could be seeing nonperforming loans to jumping to triple what they currently are. Could be looking at bad loans around 800 billion u. S. But now banking regulators say give them a bit of breathing room. Shery the latest on the coronaVirus Outbreak. In the u. S. Washington state has declared a state of emergency after reporting the first death in the country. Officials are investigating a possible break out a health facility. A reporter joins us on the line. The concern was in the u. S. , spreading was silently. Give us the latest numbers and confirmed cases and whether we will see testing. In the u. S. There is only 22 confirmed cases. That number is really not representative of what many people because as you mentioned, there has been limited testing for the virus. An expectation is only the most severe cases are just surfacing the groupsd of non of people you were not watching because they have come over from china or Something Like that. The expectation is the number of cases is going to rise. The good news is you will see andcase count go up probably diagnose people earlier on. You will diagnose people who and Something Like the flu for them. The situation will change rapidly as we get more of the state and local level testing which has been lacking. We will get a better picture of what this disease looks like in the u. S. In terms of testing capability, in asia we have seen huge disparity between like japan and south korea. That has played to confirmed published infection rates. We know the state of things in the u. S. Given the issues with testing kits . Apparently the issues have largely been solved but they are working on getting those new states ands out to cities. There is an effort by local labs to develop their own tests and private companies. All of it will amount to a substantial increase in diagnostic capacity within the next week or so. My expectation is there will not be major limits on testing capacity. That should disappear. As testing goes up, so do the diagnosis numbers. Those will go handinhand. Reporter. U. S. Health thank you. We are keeping a watchful eye on those developed in the u. S. As the coronavirus fears become global. You can see that playing out in the early part of the asia trading session. One of the big movers to the downside, baker shes. They had a delay to their earnings and guidance because of a greater error. Data error. This is another disruption with the coronavirus, the locations and supply chains. They saw this normalized and staying stable. Firsthalf revenue 741 million australian. They remain in constant deception with discussion with suppliers regarding the virus, saying they havent been impacted yet but they expect supply chains and challengers to remain in the shortterm. Lets say on the coronavirus story and talk about how it is playing out in markets. Hide awaymost kind of from his markets, just looking at these numbers. They are scary so far. The rba has gone from expectations of not doing anything yet to dramatic calls out this morning. Was jpmorgank it and Goldman Sachs in the last 16 minutes that dropped in the terminal calling for a rate cut tomorrow and another in april. That would take the cash rate to lowell governor talking about bond buying, we will be there likely if the calls are correct, april. It brings to mind how quickly the situation is changing expectations of markets when it comes to the fed. Weould say six weeks ago were talking about the fed on hold for the rest of the year. Now goldman is saying 50 basis points on march 19. Those expectations are changing rapidly. If the situation does improve, those cuts get price up. At the moment those are the expectations. The reason why youre seeing treasury futures bid up, we will see yields falling with took to open and record levels in australia and in new zealand. Shery what are we expecting for the japan open, because we are seeing safe haven moves now at a threeweek high . Yen. i was looking at the first thing i looked at when i woke up this morning. Bit hong kong time, little of liquidity, dollaryen went as low as 107. Futures are pointing to a sharp decline at the open in tokyo. Maybe 2. 5 . Shows you from last week, youre seeing deaths now, the price of protection in case the nikkei falls, below 19,000. That is the same story from last week and it looks like markets havent come to grips with what is going to happen. Shery david ingles, our Bloomberg Markets anchor, thank you. The New York Times reporting Pete Buttigieg will quit the president ial democratic race. Majorhe first openly gay president ial candidate. He rose to the top tier but wasnt able to build broad support it again to the South Carolina primary. Seen him have a pretty good performance with black democrats of and we also have that signaling an inability to build a Broad Coalition of voters. He did win the Iowa Caucuses narrowly but the new york post, the New York Times reporting Pete Buttigieg will be quitting the president ial race. Bloomberg has learned this is in fact happening. Mayor buttigieg suspending his campaign for the 2020 democratic nomination. Su we start with italy which is aiming to widen the budget deficit to pay for the equivalent of 4 billion in emergency measures to cope with europes worst coronaVirus Outbreak. Deaths have risen to 34 and the extra spending would include spending for exports. Some schools will be closed monday. The iconic blue museum in Paris Louvre Museum in paris is shut. Europe is facing a migration crisis after turkey said they can use its territory to escape syria and other warravaged countries. Greece has invoked an e crisis after turkey said they can use. U. Emergency clause. Ankara is refusing to accept that. It is not clear if the people remain at the border. Police and demonstrators clashed in hong kong sunday as antichinese protesters arrested. A protest directed once again errupted once again. Police fired pepper spray and at least one officer drawing a firearm. Train services at the local subway station were suspended after protesters set fire to one of the entrances. In the u. S. , the race for the president , joe biden is hoping his South Carolina primary win will boost his campaign into super tuesday. This as senator Bernie Sanders continues to feature strongly. It was bidens first victory in three campaigns for the presidency and allows him to stake a claim as the strongest moderate in the race and the one best positioned to stop sanders and challenge President Trump as we just heard President Trump. As we just heard, Pete Buttigieg has dropped out according to sources. Israels Credit Rating could be lowered if mondays National Election fails to produce a workable government. A review could happen if the vote leaves the country without an administration that can pass a budget. Israels economy is under inconclusive two elections and also from a widening coronavirus infection. 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 seeking in. This is bloomberg. Shery will be joined by ig analyst carl to discuss the outlooks this week. Haidi and how the coronavirus is affecting Global Demand for energy as Oil Prices Plummet in the asian session. This is bloomberg. We will have to prep slightly to bring down our forecast, and most likely, this is a vshaped affect. It could spill over to the rest of the Global Economy. But it is still too soon to even speculate about either the size or the persistence of these effects. The view is the Economic Impact of the coronavirus will be focused in the First Quarter and be bigger than the past. The policies will be more effective. The best thing governments can do is rather than worry about stimulus measures very that comes later. It is not cureall. But it will provide a little bit of support to Consumer Spending and to the u. S. Economy and the Financial Markets. Haidi global central banker speaking on bloomberg tv about the Coronavirus Impact on Monetary Policy. Joining us is thank you for joining us. Action, at the price after that horrible end of the month 5 friday. The china pmi, even for those of us bracing for an ugly sprint, it was even more horrible. Are we at a point where we throw out all of our projections and broadcast . Askedis should first and questions later. That is what happens when volatility hit the levels we have seen. There is a level of prejudice because of these crises because well markets have been as globalized and sophisticated as they are now, we havent seen a Virus Outbreak that could bridge this. That is what markets are worried it is putting out across the globe and the risk is still quite not quantifiable. All of the policy responses now it to be rolled out, is a mindset that is technically short. Momentum good run in risk assets to the downside. All of this new information continues to be digested. The market currency currently pricing in four rate cuts from the fed. You can see futures are signaling we had calls from j. P. Morgan saying australia will be lower by the end of this year. Is there still a Central Bank Put . There is some head scratching with no amount of Monetary Policy easing able to fix this with the incredibly unpredictable and unpredicted macro risk of the virus . My biggest concern is we will get a better deal of this we are making this into crisis and the markets havent responded that strongly yet. Hours, this trade i suppose, pricing in such accommodative Monetary Policy is we can start to see a bottom, looking at the stock indices, there has been a significant off on friday. D but the worry for me is the markets are arriving at this conclusion that it will be cut. Logically, if there was a conference of central bankers, cant actually do something meaningful to stem the tide here, it would be set to manifest in the price. Assuming maybe mystically the markets are behaving rationally at all, markets are not pricing in on the basis it will have some fundamental impacts on real Economic Growth globally, but they are asking for extra liquidity because they are concerned about stress. [indiscernible] ofwell as some other areas western markets that are clearly exposed to some kind of incredible Systemic Risk because of very high levels of leverage. We are not seeing that in credit markets just yet. Credit spreads are still pretty narrow. That is my worry. The markets are waiting to see because of the risks of Financial Stability. Whether that will be enough to manage the macro risks, the markets are looking for even less than that because Monetary Policy is a long time lag and there will need to be more Government Support to be able to have an effect on growth Going Forward. View, massive selloff we are seeing now, does it signal the end of the rally it ave seen so far, or is healthy correction . I think we are hitting the crossroads that it is going beyond correction mode. You look at some of the key levels metrics when you might have pointed out saying markets, some of these are fair value. We have gone below those. The markets have your valuation metrics, probably slightly below the fed now. The correction low has been priced in. We are getting to a point where markets are overshooting those levels. We are getting markets pricing in the rates to future growth and earnings. It was really telling we bounced off of those lows. Sign,p 500 that is a you can see if there is a base, but as it stands, volatility at , given the 17 or 18 level that says it is risk way. Ode, skewed that i think we are getting to a point this is not just a correction it is pricing in very low growth. Shery we have plenty more coming up. This is bloomberg. Haidi a quick check of the business flash headlines. This one is said to have taken a stand in twitter and well push for changes that may include replacing the ceo jeff dorsey. They are nominated different directors to fill vacancies that may arise. He has 4 of twitter am a placing him among the top 10 shareholders. Shery tesla taking over the adding more pressure to the conglomerate. The government of Hainan Province has appointed a executive german and working party to eliminate the threat to the travel industry which is hnas main source of income. The China Development bank are also involved. This is bloomberg. This is bloomberg. Tv just keeps getting better. How you watch it does too. This is xfinity x1. Featuring the Emmy Awardwinning voice remote. Streaming Services Without changing passwords and input. Live sports with realtime stats and scores. Access to the most 4k content. And your movies and shows to go. The best tv experience is the best tv value. Xfinity x1. Simple. Easy. Awesome. Xfinity. The future of awesome. Su i am su keenan. We start with the coronavirus and its spread. It has reached more than 65 countries around the world with the u. S. Imposing travel restrictions on korea and cases in italy searching surging 50 . More than 3000. Health officials are trying to contain they say the window is narrowing to contain it. The Energy Conference has been canceled in houston. Russia says it is ready to cooperate with its opec plus allies to support the Oil Market Even though it is comfortable with current prices. President putin said the alliance established itself as a effective tool. He was speaking ahead of the meeting in vienna where saudi arabia will push for new opec new output curbs to meet. Pete buttigieg is now abandoning his race for the white house. Sources including two aides in the New York Times and the Associated Press said he is suspending his campaign for the democratic emanation nomination to challenge President Trump. This permits the continuing Strong Performance from Bernie Sanders and joe biden. Cracks may be appearing in the peace deal. The afghans president said they have not pledged to release militant prisoners in the deal agreed to. Mike pompeo described as momentous it aims to wind down the war which became the longest conflict in american history. In malaysia the country has delayed what the fire former Prime Minister hoped to be a noconfidence vote in the new Prime Minister. It was sworn in as the new lastr over the weekend week. He gained power with the support of the party with the x prime prosecutedo has been with the 1mdb scandal. 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. Keenan. This is bloomberg. Lets take a look at the markets and the destruction we have seen. This is where we are at when it comes to trading in the first half an hour. 2. 5 lower, this is the longest losing streak since september 2018. That was eight sessions in a row. Trading at the lowest since may 2019. New zealand, we are asking the market trading off the session lows but still over 3 to the downside, down the most since october 20 18, 6 Straight Days in the selloff. Chicago and nikkei futures looking negative into the open of tokyo. That would make it a sixth straight day of losses in the japanese markets. You can see capitulation when it comes to the start of u. S. Trading with futures off by over 1 for the s p. Lets stay on markets and bring in the cross assets team editor. We are looking at these markets and it is interesting because so far we have had the fed statement say it was appropriate. The market is pricing in four rate cuts by january next year. Points on thes rba by the middle of this year. It is is it interesting to you we are nothing the positive effect of any perceived centralbank put at the moment . It is but to some extent people were starting to assume that the Central Banks might do something last week. So the fed putting out a statement is kind of people saying we thought that was going to happen so it is confirming what they had thought as opposed to being something new that might surprise the markets and put a base under anything and then of course you had things like the china pmi that looked worse than expected and people are really still uncertain as to the broader impact. And then with the spread to more countries and the increasing number of cases, the uncertainty is still there as well. What about the earnings outlook in the coming quarters . Grim becauseoking so Many Companies are having trouble with their forecasts, maybe saying we dont know if we are going to be able to do with our prior guidance. You have firms like jpmorgan, goldman saying we might not get a lot of Earnings Growth, slashing estimates of what they were thinking in terms of Earnings Growth which affects company valuations. If you are looking at what kind of priced earnings ratio you should have on stock, that is hard to evaluate now for a lot of the shares. Shery thank you. Today marking the first day of a month on shutdown of schools in japan, Prime Minister shinzo abe dealing with the crisis that threatens the economy, the olympics and his own legacy. Joining us is the former japanese ambassador to the u. S. Always great having you with us. Good morning. Good morning. Shery we are seeing increased criticism about his handling of the coronaVirus Outbreak, whether that foreign gene the authorship in yokohama for the cruise ship in your obama or the limited testing , as you have learned already 960 people are infected. 700 of them are from the cruise homethat was at you go which was a british ship yokohama which was a british ship managed by america. , aboutan 300 japanese 250 are affected. People really look at the cruise shipthe whether it was correct or not. You have these views and also taking the necessary steps in the outset still to be discussed. But now they have stepped up his measures and i think what we are trying to focus is that we get all of the majors now and look at what we have done already at the outset was enough or not. Having that be scrutinized and discussed later. Shery we are still waiting to see what the fate of the summer olympics will be with took to having spent more than 20 billion getting ready for this massive event. Tokyo having spent more than 20 billion getting ready for this massive event. What if this gets canceled . It is not a matter of money. It is a matter of the experts should give advice to government thinkhey are asked i not at this stage but when the time is coming closer, i think we have to discuss if we can go on or not. At this stage, begins in the Japanese Committee and the government is saying it will go on as we have planned. Basic responsehe we are taking at this when it is coming closer. We have to make final decisions. Haidi how damaging is this for the government and the Prime Minister . I think if you say it is postponed, or is it suspended, are you talking about haidi nagy things but related of course, really the handling of this situation, particularly the diamond princess very we have heard from one Infectious Disease expert who went on board to survey the way the diamond princess, the procedures that were in place. He was critical of what he saw. Abouthink you are talking [indiscernible] he has sort of retreated a bit. Rom initial remarks he was it a criticize or he learned more about it, i dont know. There is criticism about the diamond princess and we have to really look at it if we have done right. But what we are focusing is not that moment. More important thing is what we do now. I think that we should learn at thew we have done initial stage. We have to keep three things in mind. One, transparency, one, speed, one comments of approach. Comprehensive approach. As for speed and conference of this, we have to look at the latest stage. What does this mean that . Is it likely to go ahead . T twowo it could be likely because, president xi has lots to do at it may not be good to be seen by people in china if ceremoniald do this welcome things come whatever people think that usually wants their leader to be in a serious note. For example, the australian premier has canceled his visit here. I think these things could happen. It doesnt really damage bilateral relations. They have not decided it. I think it is not for us to say. It is either china or mutual. Haidi thank you so much. We have seen Something Like this when president eisenhower came to japan during his security treaty issues. He had to cancel it because there was ryan in japan. This thing riots in japan. These things can happen. Haidi thank you for joining us. Next, cgsci msci joins us. Cases surging your manufacturing hubs. This is bloomberg. Shery counting down to asias first major market open, korea. 2 afterfutures down it closed at the lowest level since september. We got positive trade data over the weekend, exports rising for the fourth time in more than a year on Semi Conductor sales. That in february, but it doesnt count. We have the coronaVirus Outbreak in place. We are getting pmi numbers out of south korea this morning. The country has responded to the expanded u. S. Travel curbs, urging washington to refrain from excessive measures. The death toll has climbed to 18 3700. Ses topped was the south korean what is the south korean government now saying . Oforter it has been a lot containment for not only the coronavirus but also diplomatic efforts. The south Korean Foreign minister yesterday called the deputy sayingtate the u. S. Should not take unexpected measures towards south korea, reiterating the efforts the south korean government is making in order to contain further spread. The south korean government has been protecting protesting against the vietnamese government for rerouting an as iana Airlines Flight from landing in the original destination airport. It is a lot of these diplomatic efforts south korea is taking on. It is rather delayed a holistic ban on chinese visitors coming into korea, hoping somewhat of a diplomatic strategy would be returned on behalf of them. Haidi in terms of this religious sect in connection to the surge in korean cases, have we seen further kind of tightening the returns of the gathering and tracking of the membership . Jihye according to the south korean Health Minister, 73 of all confirmed cases in one city alone is connected to this church. The government has asked all of the citizens nationwide to refrain from taking part in large mass religious activities. This includes confined spaces in large numbers. A lot of religions in south korea, not just this one. A lot of others are taking to Online Services as a substitute following the nations guidelines. This reached about to mass assemblies and protest in the middle of the cities. Many are being asked to refrain from taking part in that. Haidi thank you so much for that. With the rapid rise of coronavirus in south korea center dot around the Industrial City centered around the Industrial Citywith the rapid, s to the Energy Supply chain. Lets talk to the head of research here. What do you see in terms of the length of disruption and the extent you see given we have already had all of these concerns about a potential dislocation of the Global Supply chain . Was on thetial issue wiring harness product from china. As we have seen most recently, the main issue of the disruption now is coming from the korean plants. As we saw in the recent use, the particular religion, we have seen a lot of auto suppliers employees also tied up to this group. Some of the infection is now halting production in korea. Rapidlyult, oems can come back if they confirm there is no more convection infection around the sites. But given this city has 20 of a lot of the listed companies which are located there. At least 20 of the supply chains are within that industry cluster of this area. That is why i think some production halts could happen. A bigger picture, there could be two more weeks of time needed. In terms of the demand side issue, we know auto sales have been suffering. Is there a sense of balancing or consolidation of the supply and demand with disruptions . Kj it is difficult to generalize. We will see the monthly exposure of the markets. That is when we will able to confirm the domestic and export figures for february. In my view, it is from what we in 2016. G the break the fatality rate could be lower , but the spread of rate is much faster. People have the fear of going out and grouping together. The dealership traffic has fallen below 40 nationwide. I think the weakness could continue for the time being unless a particular religious group of people [indiscernible] in hindsight i expect to april in terms of the figures. Will the government step in when it comes to vehicle purchase taxes . They will raised in february. Kj it was expired last december. They are going up again. Given this tax benefit was already good for the past two years, i feel a lot of pentup demand for this benefit was kind of absorbed last year. Report,rms of the taking into we might have to see and apart from some of the new models that were unveiled recently. As for the aging models, there is still some repressed demand especially outside of the metropolitan area. Thank you so much for joining us. The securities head of research. We are getting these lines from the japanese economy when it comes to capital spending,. Ontracting 5 year on year that is much worse than the construction of 2 . Fourthquarter profits falling year on year. Ourthquarter sales falling capital spending, the headline number, contraction of 3. 5 . To keep in mind, this is the numbers we are seeing for the Fourth Quarter. It is fair to say we are starting expecting deterioration. Lots more to come. This is bloomberg. Haidi this is Bloomberg Markets asia. Shery lets get back to that breaking news earlier this hour. Mayor Pete Buttigieg is ending his campaign according to people close to his campaign. We are expecting a speech later in south bend, indiana to confirm. Lets bring in ros krasny. Tell us about his departure. Ros Pete Buttigieg has been in the same moderately as people like joe biden moderate lane as people like joe biden. People think his decision is related to how well the former Vice President joe biden did in South Carolina yesterday. The Democratic Party they need to coalesce behind one candidate and biden is that guy. Did or diduttigieg not do is be made very few inroads among the africanamerican community. It is an important voting block for democrats in the primaries to come. Having seen how poorly he did, i think hes on a path to continue the nomination he saw no path to continue. Oforse biden or how he kind princes departure. It seems like whatever , goodtage of the vote portion of that will go towards joe biden. This is part of the moderate democrats getting behind a key candidate to take on Bernie Sanders. Carolina,after south was that victory decisive enough to blunt the momentum of Bernie Sanders going into super tuesday . Were a betting person and saw the margin of victory biden had, it was more than the opinion polls have shown. It creates momentum for him. There has been a lot of people endorsing biden today. I wonder if the campaign is thinking, i didnt we hear from you before . They are coming out of the woodwork. It seems like there has been a shift in momentum. In several super tuesday states, nothing will be decided in terms of the democratic nomination on tuesday but a lot of delegates are up for grabs and i think you may see basically a twoperson race after that. Haidi thank you for that big week shaping up with super tuesday coming up. We are getting breaking news, south korea reporting its 22nd death from the coronavirus. It is one of the worst hit countries by the virus in terms of outside china. We will get more on this after the break. This is bloomberg. A very good morning, i am haidi stroudwatts, the asian markets of just open for trade. I am shery ahn in new york. Markets o bloomberg asia. Our top stories this monday, markets shaken by virus fears as chinas pmi plunged to our record low, the aussie dollar and you on weakening. Central banks may be forced to act quickly viewed quickly. Qe could be in the cards at the rba. Oil with losses, and opec and allies meet this week. Japan and south korea coming online, lets get straight to the market action. Off continuesk after a raft of bad news over the weekend. Japanese equities extending losses, the nikkei 225 and by 1. 2 . N trading ataryou in spot we see dollaryen trading at spot 24. Yields a hair more into negative territory, yielding negative seven basis points, the least since november. Last week, the worst week for the kospi since 2011. It is now rebounding my half of a percent. Australian stocks taking it on the chin. Trading at the lowest level since may, and we also see qe stocks lower by more than 3 , the sixth straight day of losses we also see kiwi stocks lower by more than 3 , the sixth straight day of losses. This was the worst week since 2008 for the u. S. Markets and the s p is in correction. The aussie dollar is relatively flat on the day, holding near the lowest level in 11 years. At the same time, we see some weakness in the offshore yuan, although it is still trading on the stronger side of seven and we see the haven bid pushing yields lower, u. S. 10 year yields at the lowest. Much. Thank you so we have our managing editor. We are getting lines from west bank, another one calling for a move from the fed and the rba saying it will cut 25 basis points in the april, and the fed could cut 50 basis points in march. Futures are showing expectations of 100 basis points from the fed by january of next year. Is it interesting to you that we are not seeing any kind of relief in terms of Central Banks . Previous guess have said this is more than a Market Correction now, it is the world pricing in materially lower growth globally Going Forward. Right, andnk thats the people are starting to consider that any you nations are risking a recession, even the u. S. What has happened in china has been so disruptive on the supply chain that demand and supply in many countries are broken. We have the Worlds Largest Class Consumer pays base in asia disrupted and factories disrupted. Many countries have yet to realize how much of an impact this will have around the globe, its not just in asia story. Never mind that the coronavirus risk is spreading further. One of the issues with rate cuts is that they dont solve the health pandemic. Monetary policy is not necessarily the right response when people are staying at home. Is about cheaper cash and easier liquidity but not not going to about a public that doesnt want to spend, they dont want to leave their houses. Youre not going to go to an event and meet people and risk getting the virus. Thats why people are worried that Monetary Policy will have a limited impact on the slowdown and governments will need fiscal stimulus to really inspire traders to get a handle on this. Exactly, it is all about confidence. How much is due to Economic Growth concerns and how much in the realization for the markets, since governments dont have a handle on this, and neither do the Health Organizations globally, and really it seems that the political system is failing here in containing the outbreak . Mark i think that issue of uncertainty is absolutely one of the biggest factors. There is a great example that on friday, middle of the day, the country seeing the biggest negative impact on assets since the coronavirus became mainstream on the morning of january 21 in asia time was actually indonesia. Despised rkets despite they have zero cases, and thats because people think they only have zero cases the get they havent tested. China has outperformed because the people think they are ahead of the issue and tackled it aggressively. That reflects the idea that the problem here could be uncertainty. Investors will face the countries that may have a big coronavirus problem but are tackling it, addressing with fiscal stimulus and quarantine measures. The countries that seem to be complacent might suffer most in market terms. Thank you so much for that. I think what you were talking about was the indonesian travel ban that australia has put in place viewed we havent really seen in place. We havent really seen confirmed cases in indonesia yet but australia is concerned about travel to the contribute you can find out more on our markets ine blog, get a rundown one click. We have commentary and analysis from bloombergs expert editors. Haidi lets talk more about china. Chinas First Quarter gdp growth adjust to percent annualized after the shocking pmi numbers of the weekend. Lets bring in a china economist. Great to have you. A lot more positive than bloomberg economics, which has just revised the First Quarter expectations for chinese growth at 1. 2 . Given that we look at gauges noe oil and were looking at growth in global oil demand, only the third or fourth time that has happened in the last half a century, is there a concern we might not get any growth out of china this quarter . But we it is possible, might look at this highfrequency track, we see people going back to work. Many of them can work from home. It doesnt mean there is no Economic Activity at all. When we track these numbers, we really see a quarterly contraction, meaning compared with the last quarter of last year, the Economic Activity is definitely contracting by 2 . Forecast, work will resume back to normal we expect by the second quarter, thats why we came up with the forecast. Short want to drop a chart that showed the pmi reading, it was like a scary movie. We were not expecting it to be good but not quite that bad. It shows the breakdown between large, medium and Small Businesses in china. We know that they are different when it comes to the Monetary Policy. They have fallen across the board but we know it is the small and Midsize Companies more vulnerable. Is the pboc able to do more in terms of transmission and alleviating the pressure the smaller side of the enterprise spectrum is going to come under in the following weeks and months . Raymond we have seen the pboc already injecting money into the money market. The question is now whether the money can go to the sector that needs it the most. For example, the private sector and fme, they have not been able to get access to the Banking Sector. No matter how much pboc pumps money into the Banking Sector, that is a problem for the Monetary Policy transmission. They have not been able to get the credit. That the pboc needs to do more, but regulators , or even the minister of finance, should think about a new way of improving the credit of fme and the private sector. ,e know in the past two years the central Banking Sector has shrunk. Thats why we do see some Liquidity Risk right now in the fme segment and private segment. We are hearing the banking regulator will allow a delay on loans from Smaller Companies viewed loans for Smaller Companies. Is this what you are thinking of when it comes to avoiding a liquidity shock . Raymond its better than nothing. Banks, and also commercial banks, those banks get some funding support from the normal banking segment. A bankinged about segment relying on p2p, or barely has funding support or mainly annoying relying on cash flow. You know that in february, basically the whole supply chain was interrupted. So there is a cash flow problem for them and their need to be other measures and support to smooth out the liquidity shock. Shery how long will it take for the Chinese Government to go back on focusing on their leverage and debt problems . Raymond i think it is immediate. A cash flow problem is very important to the fme and banks that rely on sales the virus sales. The virus is not only supply shock but demand shock. Many companies rely on the cash flow. Thisators have to address problem immediately. Has employment it is relying on, so that needs to have a new measure to smooth out [indiscernible] what does this mean for the pboc pledge to Financial Stability . Latestwe have seen the shift, united in their confidence they will hit economic and social targets throughout the year despite the coronavirus. What does that mean, given you have started to see this kind of forgiveness pressure at least on the books for bad loans . What does it mean for transparency and the mandate of Financial Stability and deleveraging . Raymond i think at the moment, its not a question about deleveraging anymore. [indiscernible] the Chinese Government as a whole wants to address. Now it is about securing employment. From this perspective, not even the gdp number method. It is more about peoples livelihood, where they can get cash. We know there are many factories that have to have a salary cut in order to survive. That is a very important aspect of making the economy run. Even when the people can go back to work, go back to town, if they dont get the sales and supply chain back to normal, there is no way to support their living. Know byhe surveys we beijing university on the impact of the virus tells Us Enterprises cannot survive within two months based on the cash at the moment. Thats why the urgency is very high at the moment. The pboc definitely needs to think about some way to smooth this much. Haidi thank you very much shery thank you very much, joining us from hong kong. We will have much more on chinas economy in the next few hours as we look forward to the pmi. Topconomist joins us at the of the next hour and we will speak to and asia economist. Also, a professor. Breaking news at the moment out of japan, Prime Minister shinzo abe saying they are looking to compile a law that would enable a declaration of emergency for the country. A city seen that declared a state of emergency at the local level. There has been about 200 confirmed cases in japan and we are now hearing from Prime Minister shinzo abe that an outbreak at schools must be prevented at all costs. There could be closures in japan of schools for month. They are aiming to widen the budget deficit to pay for the equivalent of 4 million in emergency measures to cope with europes worst coronaVirus Outbreak. Debts have risen to deaths have risen to 34. They are trying to counteract the economic damage. France has canceled an economics event and some schools will be closed on monday. The iconic louvre is also shut. In the u. S. On the president ial election front, Pete Buttigieg is abandoning the race for white house according to campaign aides. The path for the young xmen are of a small indiana city became improbable after disappointing results in South Carolina. He promoted himself as a representative of the younger generation. He is expected to give a speech later confirming the news. Israels Credit Rating could be lowered if mondays National Election again fails to produce a workable government. If the vote happen leaves the country without an administration that quepasa budget. Israels economy is already from unsuccessful elections and the coronavirus. Appearingy already be in the peace deal between the u. S. And taliban. The afghan president says his government has not pledged to release militant prisoners as stated in the deal agreed to in qatar. Pompeory of state mike described as momentous the deal to wind down the war that has been the longest conflict in american history. Day onnews 24 hours a air and quick take by bloomberg. I am su keenan, this is bloomberg. Haidi still ahead, brent moving off its earlier drop and affecting the outlook for oil as virus hits Global Energy demand. Shery it is forcing a rethink of flows across borders. More with stephen olson. This is bloomberg. Haidi we have the latest death toll and confirmed cases of coronavirus from china. China is saying the death toll has risen to 2912, when it comes to new deaths, they are at 42. All of the deaths have occurred in Hubei Province. When it comes to additional cases, they are coming in at 202. Both deaths and additional cases are slowing down from the last time china reported its latest numbers. This has taken the global coronavirus deaths passed 3000 as the infection has spread to at least 69 countries. China is saying that Hubei Province has 196 additional cases on march 1 as well. Seei we are starting to that stabilization and terms of new infections and deaths within china but of course we know that the core concern for markets has shifted outside of china. Lets look at the markets reacting at the moment, another selloff, extending japanese marketss worst weekly decline last week, in about four years. The nikkei two to five down by nine tents of 1 in what is a six day of losses, the longest losing streak since last may. The kospi flat and a better performer in the region, still low. This is probably on account we saw some improvement when it comes to exports, jumping for the first time in a year. Lets look at commodities. Oil, this is where we saw volatility this morning, oil prices crashing at the start of trading in asia, but we are starting to see an improvement or a little bit of a pickup of earlier lows. Oil has pretty much erased losses after falling as much as 3 earlier in the morning. There is still concern about the coronavirus spreading. Our Energy Reporter joins us. Seen market fallout, its a big week for oil because of the opec meeting. What are we expecting. Expecting . People are not going out and traders is at a standstill. What does that mean . James the concern really is the global impact. We have moved beyond china and the headlines over the weekend, a 50 of increase in cases and belief, first death in the u. S. And australia. That is the focus of the market. As you mentioned, we had a sharp down three percent initially, but it has pretty much pulled that back. What that is being penned on, you pointed out the opec meeting this week, and that the sharp falls we have seen may trigger a supply response from opec members. Saudi arabia is the lead candidate for that. Shery what are we expecting from this opec meeting . James it is a power play between the saudis and russia. We had comments from Vladimir Putin at the weekend, kind of conciliatory along the line, saudi has been leading the push for deeper cuts but russia is not so motivated. Generally speaking, their budget oil priceand a lower than the saudi economy can, and thats why they have been reluctant so far to jump on board with deeper cuts. Vladimir putin did say he was open to discussing it at least, and when you see the sort of price moves we have, that will be focusing in mind. It remains to be see whether there will be sanctions. It depends on how the market plays out in the days before the meeting in vienna. And of course there is a question whether meeting goes ahead at all. Over the weekend we heard that a bigrgy gathering in industry gathering in houston was called off. So there is a question about what they do about that. Look at the wider impact on commodities, lets bring in david stringer in melbourne. China pmien abysmal numbers. What are the expectations for impact on the Metals Market . Weve seen investment weighing the outlook for demand oil and that is true across the commodity complex. We are seeing people focusing on what is the global ramifications ondemand from the Virus Outbreak . Last year we saw the bloomberg Commodity Index fall 6. 9 last year, the most since 2011. It is really showing how investors are concerned about a potential drop off in demand. Seeing a bit of weakness despite the risk aversion and gold. Are we expecting haven demand to remain . David it is fascinating, isnt it . For a gold advancing lengthy stretch and then on friday, we saw it lose as much as 5 . Belowaven demand had gone investors think that selloff on friday at the end of last week was really about people cashing out, covering offers elsewhere, meeting margin calls and other markets. Theres nothing at this stage to suggest that haven status is gone. That is something we have seen in the past, certainly in 2008, and we have seen people cashing out of gold to cover themselves. At this point thats what people think is going on. Haidi really appreciate your time, david stringer in melbourne. Lots more to come. This is bloomberg. Haidi lets take a look at markets. The selloff extending into a new week in new month after february ended with the global selloff. Japanese markets with the worst week in four years and it is not getting better, with the nikkei 225 extending losses one and one tents percent. The kospi also extending losses. The supplementary extra budget that could be unveiled this week could be bigger. We are also seeing the selloff continue in sydney as well, 2. 7 to the downside for the s p, the longest losing streak since september 2018 view new zealand seeing the hefty is losses in the region, 3 lower today. Of asia pmislate in a few moments, including japan. How hard will a virus hit . This is bloomberg. Shery we have pmi numbers coming out of japan, south korea and other countries. Lets start with the japan manufacturing, 47. 8. This is a final figure for the month of february, still in contraction. We have seen japans pmi numbers being a contraction for 10 consecutive months. Japans Fourth Quarter gdp at the slowest growth since 2014. A lot of pressure on the japanese economy. The taiwan numbers falling into 50traction, 49. 9, below the threshold. We are talking about taiwan numbers having been resilient in the past two months. Ithave seen them expand when came to pmi manufacturing numbers. South korea coming in at 48. 7 which is a deeper contraction then we saw for the month of january. South korea had expanded but it is back in contraction territory. We have seen construct consumer and manufacturing the the largest plumbers plummets since the summer. The bok has refused to move when it comes to key Interest Rates. We are expecting an extra budget. These numbers showing a mixed back your but for south korea, japan, in contraction. Haidi we are looking at the rest of the asian pmi gauge is coming out. Indonesia has been in the news. This is a market that is expected to suffer today. The pmi showing it climbed out of contraction territory from 49. 3 to 59. 9. Actually ready strong as far as the leading indicators go. We know that indonesia despite its population has not responded to a single case of the coronavirus. There is increasing concern it is hiding in plain view. In malaysia we saw further into contraction territory for that manufacturing emi. 48. 5 from 48. 8. The current country continues to be involved in Political Uncertainty with the change in leadership. And vietnam in terms of the supply chain dislocation, talked about the pros and cons of where vietnam is given a lot of manufacturing had moved out of china. 49. That is another one that has fallen into contraction territory from 50. 6 in february. Lets get a reaction to these now. Virus impact is showing up in pmi. Not to the same devastating extent with the china reading. Reporter the thing that will be interesting Going Forward and what investors will want to watch is whether as coronavirus spreads and other countries have to take measures, maybe not quite as strict as what china did, but if they have to start shutting down production, will they see more of a reaction . The china pmi was a surprise without low it was. These are not great numbers but people were expecting that. But will he get even worse before it can get better . Shery we have seen resilience with the chinese yuan. Numbers, weakening for the first time against the dollar in more than a week, what other assets will be be watching . Should we you watching . We be watching . Reporter we are looking at whether the stock markets will be able to bounce back. So far investors are somewhat optimistic about what asian assets and particularly stocks will be doing for the rest of the year. As you look at the spread of coronavirus, you have to wonder whether they will bring estimates in a little bit and if there is pain ahead for the markets. Haidi we are seeing more and ise calls, the Market Pricing in 100 basis points lower next year. To mover the rba tomorrow. We heard from jvm. Is there a sense we will see the Central Bank Put take place . The question is will it help . Reporter if investors are less helpful it is than if it is a bit of a surprise. Actionvel of coordinated by the market but it is a situation where people are saying policymakers, we want you to do this. To burnkers dont want all of their ammunition if they dont have to. It will be interesting to see how they end up reacting to it. Shery our asian across assetsshery editor joining us. Lets get a preview now. Japanese equities are off of the lows of the session was still very much under pressure. The nikkei 225 off and the topix is down. We have seen this change for the korean kospi. Earlier at the open, the kospi was trading higher after the worst week since 2011. That has changed. 7 . Ospi is off lets look at the commodity complex. Copper falling for a sixth straight day, at risk of falling to the lowest levels of the year. It has been fluctuating, earlier down 3 . Then moving to gains. Opec is expected to convene or , but many are hoping for a deal. We see gold now moving to the under, up. 3 but still 1600, this after the steep selloff friday a drop of 3. 6 , the worst since 2013. We have seen some very strange movements, particularly what we saw on friday. You can see that as being counterintuitive. You would expect gold to gain but we saw that very steep decline. We have singled moving up to 7,000 a tryouts. Troy ounce. A to bf strategists have to this to selling. They have to cover margin calls as they are called, but today we are seeing a slight come back at not as much as compared to the steep selloff we saw friday in the yellow metal. Shery much of the market uncertainty stemming from the look coronaVirus Outbreak, the global death total moving past 3000. Lets bring in Tom Mackenzie. We have the death toll in cases rising. Within china, the pace of the rise is slowing down. That is true, noting the global death rate above 3000. Another grim marker in the historical trajectory of this disease. In china the good news is the rate of infection continues to slow and we have seen that the last two weeks or so. The cases reported from march 1, 202 is one of the smaller numbers we have seen. The death rate, 42 deaths. In china you have bad about 2900 deaths had about 2900 deaths. The majority of the cases are in Hubei Province. It isot had something people are monitoring as people try to return to work. The World Health Organization is pandemic. To call it a but the window to contain this continues to narrow. They are calling on people across the world to get ready to tackle this virus. The containment efforts in countries like vietnam, singapore and in china have been effective. They are telling people get your act together. They have raised the risk level, not calling it pandemic but we expect additional cases around the globe. The World Health Organization is upping the ante even if they are not ready to call it a pandemic. With almost 70 cases in the u. S. And one confirmed death, we are getting breaking news saying the california Santa Clara County has reported three new virus cases. The obvious concern is this is a global problem. Tom absolutely. You have seen that across countries, multiplying the number of cases whether italy with a 50 increase in the number of cases, iran, the number of cases doubled, about 1000 and iran, 54 have died. In iran, 54 have died. Close to 4000 confirmed cases in south korea and 18 deaths. France has additional cases. It is bad when the french stop telling their people to stop kissing. Start people at least two additional concerns. The numbers being tested will increase. The numbers will continue to rise almost inevitably. Washington state is switching focus in the u. S. They have had a number of cases, the first half and first death and they say it could have been circulating in the state for six weeks. One academic says it is inevitable you will get a serious outbreak in Washington State as well. We heard from officials they will be ramping up the testing. It seems inevitable a number of cases will rise. The question is whether the Health Systems are prepared for this. Mackenzie in beijing. Lets get to su keenan. Su we will start with russia which says it is ready to operate with its opec plus allies to support the Oil Markets Even though it is comfortable with current prices. President putin said it has established itself as an effective tool. He was speaking ahead of the week of opec plus members in the anna where saudi arabia in vienna where saudi arabia will push for a cut. Police and demonstrators clashed in hong kong on sunday as antichina protests broke out again. They were outside a metro station. Police fired pepper spray. At least one officer drew a firearm. Suspendedices were after protesters set fire to one of the entrances. Europe is facing a new migration crisis after turkey told millions of Asylum Seekers they can use its territory to escape syria and other warravaged countries. Grace has invoked greece has invoked in you emergency eight you emergency funds. 76,000 people left turkey on sunday although it is not clear if they crossed into europe or remain at the border. 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. Shery we will look at how concerns of the coronavirus are affecting global trade with a former u. S. Trade negotiator. This is bloomberg. Shery new york state has the first positive test for the coronavirus. We had heard earlier new york two people whog had traveled to iran for the virus. Hasgovernor andrew cuomo written the statement. We only know new york state has tested positive for its first case of coronavirus. We know that Washington State has declared an emergency after the first death. There are around 70 confirmed cases in the United States and now the first in new york state. The outbreak really having an outbreak on the Global Economy especially in china. We have seen that leak factory and Services Data underlining the task to return output to when a turn the next guest is to rethink the flow of goods across borders. He joins us from bangkok. Thank you for joining us today. We continue to see these disruptions in the supply chain globally. We have seen the trade war between the u. S. And china wreaking havoc on these industries. Will we see a rethink of china as a base for production . It is entirely possible. Keep in mind there is traditionally been high degree of confidence in trade. Predictability, stability and to deliver mutual benefit. In recent years this has taken a real battering. Now we have got to factor on top of that, the implications of the coronavirus. I dont think this experience will be quickly forgotten by the risk managers or people responsible for ensuring National Economic resiliency. The recalibration of our approach to trade, and we ask how can we make trade more sustainable and resilient . Do in thet will it shortterm for trade flows, given the trade truths and there has been huge commitments to buy from the u. S. . In the shortterm keep in in upply chains is not not something anybody can do overnight. Ber the longer term it might a little bit of a different situation. In terms of the phase one trade agreement i think you will see a couple of what i would refer to as trade policy trickle down implications from the coronavirus. There are some substantial purchase commitments bid made by china. Under the best Case Scenario this will be very ambitious. And now we are going to be even more difficult to meet. I should point out the agreement contains a provision by which the countries will consult. The coronavirus, it would meet that criteria. I hope there is going to be scope to manage any missed deadlines in terms of implementation. The other point i would make, keep in mind since the outbreak of the coronavirus, we have heard virtually nothing about the commencement of the phase two negotiations. I dont think anyone is going to be focused on that while we have significant coronavirus issues. With the u. S. President ial election looming, we will reach a certain point where those negotiations will be deferred to 2020 when the u. S. Might have a new president. I think the coronavirus stamps a big question on top of the phase two negotiations. Haidi it is not just the flow 100,000 but there is people that cant get back to get back to school because of travel restrictions. That is right. The out most obvious impacts are on trade but there are other areas. Australia and its dependency on chinese a students. Australia is not the only country. Those students are staying home as australia our chinese tourise Chinese Tourists. Create difficulties for thailand which is reliant on Chinese Tourists. A lot of gdp is generated by these Chinese Tourists who are generated you are staying home. Haidi Heinrich Foundation Research Fellow stephen also joining us. After a week of political turmoil, malaysia has named its new Prime Minister. The old one is not leaving without a fight. This is bloomberg. Haidi this is Bloomberg Markets asia. I am haidi stroudwatts. Shery i am shery yen. We are almost half an hour away from the market open in hong kong. Of course it has all been about the pmi numbers this weekend. What are you watching for when the markets open . Ofid further repricing growth expectations. I was about to say 30 minutes back looking at my screen, there were some signs the markets were stabilizing. Headlinesl of these coming out of new york. Looks like markets are. Ontinuing to be simply on edge sort of the reason i bring it up when it comes to china. I am watching the 10 year futures, following this move down. We are seeing new zealand, australia, the u. S. , 10year futures is one i want to watch 20 minutes from now that put in a record today. Haidi what else are you watching . A lot of things. Hong kong, retail sales coming out later today. That is for january. Hong kong protests are back. The chart behind me now, you can see a version on your screen, you are getting a lot of detection getting priced in. A looking at put options, 24,000, those options are rising. Dothe event we [indiscernible] for this specific month. Thank you so much. David ingles. Chan. Ked to paul this conversation we also have budget and whether it will be enough at this point. After the weakest political there is a new Prime Minister in malaysia. The old one resigned abruptly. The government is halfway through its term but was elected because of the other one was tainted by the 1mdb scandal. Lets get the Haslinda Amin who has been covering this. Where are we at . Haslinda no one really knows. We have a new part minister waiting to form a candidate, unprecedented political turmoil, something we have not seen even in a multipolitical situation in malaysia. We are seeing how allegiances have shifted over and over. We have one person breaking away and then breaking away from the other one and the other guy back. It is really quite difficult to pinpoint where allegiances are now. All we know is in the course of one week all three claimed to have the majority. All claimed they had the right to be the Prime Minister, not until this king stepped in and talked to parliament, concluded there is no majority and on saturday appointed pretty much the guy to be the new Prime Minister. Where do we go from here . We are awaiting the cabinet and also for the man to call for a vote of noconfidence. That cant happen until the candidate meets. That was poised to be march 9 but reports are suggesting that might be delayed. This is a government in limbo and country in limbo. Shery thank you for that. Haslinda amin joining us in singapore. Breaking news out of the bank of japan. The boj will strive to provide stability with asset purchases. We have seen the boj scaling back purchases of etf, not to mention real estate investment. The boj will strive to provide the governor kuroda saying they will try to provide stability. Through operations and asset purchases, given the instability have seen on the coronaVirus Outbreak, that they will closely monitor future development. This is bloomberg. This is bloomberg. It is 9 00 morning morning monday morning in beijing. I am shery ahn. Todi we are counting down the beginning of trade in hong kong. New volatility after the pmi data plunged to a record low. We will be getting the ratings ahead of this hour. Central banks may be forced to act quickly. The boj the kiwi could be on the card. Oil extends losses into a seventh day as demand for energy falls. Opec and its allies meet this week