Transcripts For BLOOMBERG Bloomberg Markets 20240713

As the outbreak crippled. Ctivity Saudi Arabia Oil export to day. D 10 Million Barrels a determine withts get you set up quick check of the markets. We are seeing u. S. Futures under pressure at the open. This after stock markets. Ebounded we have s s p 500 really moving green after we heard that the fed was commercial paper facility and additional move the we havent seen since financial crises. We are just getting more details from the fed. Establishing primary deal credit mentioned, were also getting a Deal Offering and funding. Rate. Te matching discount it will allow primary dealers to support market functionality. From jae powell saying thats what the fed was focused on which is restoring normal function in this dysfunctional condition. The fed saying that primary deal Credit Facilities established section 133, saying that available for at least six months from now. March 20th. Le starting on maturities up to 90 days. Were getting some of that on thecoming through latest effort by the fed to try address the really volatility and the lack of liquidity and markets. N financial were not seeing a great reaction when it comes to stock futures. U. S. Stock futures falling. We are just getting through the details as the prime minster of australia addresses the nation. Government announcing a 715 million relief package for airlines. Well be watching this again. Are going to be keeping close eye on aviation stocks. The airline had canceled or delayed flights until june 14. Measures to be announced today as more policymakers are reaching deep chest because of the fallout of the virus. Goldman and Morgan Stanley warning that the Global Economy is in a recession. We are see running futures trading mix. Well see whether or not we can track the days on wall street. Higher. Ate biggest jump since october 2008. Terminal now to visualized reaction to the fed unveiling of commercial paper facility. Did see euro dollar bases back. Ulling constituent notably wide wider. Otably pulling up the board today, voe. Have ecb and boe capping fed boj auctionter the we saw on tuesday. Of dollarightening yen basis swap after that allotment. We may learn of south koreas address the cash crunch but even with the measures from central bank, some are wary wade into credit market. Reversing the dislotion will take more work for the fed as fiscal side. Let bring in patrick for his insight. The president and founder of caliber financial market. Its time tosaying sit tight on equities. Are there any alternatives . Mentioned that what youre doing lot of now and holding. Dably, its period of volatility is this, activity starts to act very rational. I spent lot of time as you said, hand holding clients. Keeping them from making and irrational decisions. Being diversified when you so you do havef and if some liquidity, stick to quality names. If you do happen to get a rally, maybe take shortterm exposures off the table. Volatilityperiod of for the foreseeable future. On theseyou be selling rallies . We know it can be pretty good on we get moret until visibility for the end might be for the outbreak . It matters what your time horizon is as in an investor. Would preach more so discipline around longterm investing. Getting entry points where there is a cheap selloff do get aerday and you bounce back rally because the federal government comes out with some encouraging information. You may want to take profit and look for another better entry point. We will see these wild swings continue. More clarity around the disease. The fed now seeing that establishing that primary deal of credit facility. This is following that facility. Paper were seeing more crises there. Help . Ch will this certainly think it will help improving the continuity of the liquidity in the system. Thats what the Federal Reserve do. They did cut Interest Rates hundred bases points orthe weekend. I dont think that will have improving liquidity or the market. Starting special paper facility earlier today. That will have a meaningful impact. Going to be immediate. It should help to improve the liquidity overtime in system. More people are saying that global recession seems inevitable. How do you trade in this environment . Try not to do too much trading. I certainly try to approach this with a longterm view. That being said, before the whole outbreak hit the news u. S. Economy was fairly strong. Haven a period where we next to zero Interest Rates, the market is going to price in once the Virus Outbreak start to reduce and hopefully fatalities reduce, the market is forwardlooking. See a pent upll demand and bounce back in the equity markets second half of the year. Where would you say the quickest recovery. Any particular names that you like . I think lot of the sort of retailers that are more driven where you dont have to go to store to purchase items. Name thats front and center with everybody. They have announced they intend limit nonessential shipments for the time being. At some point people will start shopping again when they start feeling better about the economy. Some significant pent up demand reflected in that. Patrick, thank you so much for joining us. Prime minster is speaking in australia right now. Lets get you the latest. Saying the australia, set to take pressure aviation sector. Introducing more capacity cuts. For international, 60 for domestic. Were getting confirmation of that 750 million reach package for airlines. Hearing from prime minster. In ais really once hundredyear event for the coronavirus crises. Theres no sort term fix. Were expecting to get more healthcare measures announced today that have been reports there will be delegation to the individual state as to what they like to do in terms of closing down public areas and bars to avoid large scale gatherings. That get you more as becomes available. To date. You up boost oilrabia is to exports in april and may to acord of 10 Million Barrels day. Kingdom capsls as field. They are determined to fight with moscow. Majors toenergy consider spending cuts. Unders left average just 7 Million Barrels a day. From china prompting downgrade economic performance. Banks and analyst say the quarter will contact it as the coronavirus kept people at home and manufacturing shut down. Forecast is year on year growth of 3. 8 down from when theen on monday data was released. Is at 5. 4 . Owth the coronavirus sent hong kongs Unemployment Rate to highest in a decade. As the infection further hurt companies. Uggling rate hit 3. 7 in the december through february period. Highest since january 2011 and estimate. The median five straight months of rising unemployment extends longest financialsince the crises. Aredemocratic primaries being appended five states with severalctions pushing primaries back to june. Primary voting is under way in florida, illinois and arizona. Although turnout is low. Some polling places in florida been unable to open the 8 00 p. M. , at 8 00 a. M. Hong kong, 664 are up for grabs. This is bloomberg. Still ahead, going public in virus market well discuss what the outbreak has done to ipo market. Coming up next, well have of europe ast leaders agree to control the infection. This is bloomberg. Trump administration is pushing 1. 2 trillion stimulus plan to blunt the economic of the coronavirus. The package could include or more to 1000 americans within two weeks and possible tax deferrals. Were looking at sending checks to americans immediately. From hard heard working americans, Many Companies have now shut down whether its bars or restaurants. Americans need cash now. The president wants to get cash now. I mean now in the next two weeks. Very big bold package. Big and bold and level again of enthusiasm to get something done. Think i ever seen anything like it. In Kevin Cirilli in d. C. Great to have you with us. The hope is that youll gettal of those funds dispersed within two week. Weve seen what happened back in didnt happen for at least two months. All ofit likelihood that these expectations of fiscal stimulus will go ahead as the wants it . Very likely. I i was speaking with democrats all afternoon. What i can tell you, they are really speaking from the same playbook. Everyone is understands the need be massive,ere to large economic stimulus. 300 billion in Small Business loans. 250 billion cash payment. 500 billion in possible second liquidities and tax deferral. You got there, treasury mnuchin working with speaker of the house nancy essentiallyg 1. 2 trillion worth an economic stimulus is likely on the way. Kevin, were finally getting bipartisanship. How quickly are we like to see through . Senate Majority Leader Mitch Mcconnell said theyll be working around the clock. He is not going to let the senate go home until they get stimulus through. They are working around the this in order to get through. The president said he wants this done within two weeks. Thats the timetable based upon my reporting that im hearing as well. Amist there, we are seeing democratic primaries in arizona, illinois. D little bit of execution over ohio. Whats going on . Ohio canceled. Ohio was canceled just hours before. There are lot of questions in terms of whether or not primaries can take place particularly at a time which are urged to stay home. The Democratic National Committee Chairman tom perez put out a statement he said that he would like states to look at early voting and mailin voting. Thats one of the steps they like to see happen. Maryland governor, larry hogan, a republican, he already primary and other states delaying the primary. There are going to be results tonight in key battleground state of florida and illinois and arizona. We get the data in, well see how the Global Pandemic the vote. Cirilli there in d. C. With the latest on potential stimulus for the u. S. Were getting more from the speaklian prime minster to the media. Saying all citizens in australia are not to travel abroad. Minster now certainly saying cancel nonessential travel. Backow that if you coming into australia now from overseas destination, you are subject to day quarantine period. Australia will host indoor public gatherings not larger than 100 people. That larson saying australia has declared Human Security emergency. Australia has the secretary act. Gives the government number direct and risk minimummallization. They may have to provide impact including diagnosic samples. Maybe put under isolation. If theres a lack of concern to and under that bysecretary act. Really the context of australia declaring human by emergency. With that stimulus to the telling alls australian citizens not to travel abroad. Europe ino unprecedented move. Agreed toeaders travel. Most whats the latest that we are of thesee replication peoples across the world now . Thats right. Quite a stunning move even though here also it was expected and it reflects seeing around the world. Several eu Member States are in lockdown. They are shut down shops, bars, and restaurants to help the pandemic from overwhelming the healthcare system. Isolating the eu from elsewhere, it might take some of states to close off internally. Thats interesting because the whole framework of the eu is on the idea of free movement. Some of the Member States are limit the barriers internally within the eu to travel. We have seen close intention italy overtria and their border. Stillsaying weve got to allow people to move around. This may have the effect of allowing some movement within secondion. It will be a closure. Once it takes effect, it will be affecting all noneu citizens. About the we know brexit time line and how this coronaVirus Outbreak might affect that . There were talks to be eheld london this week starting between negotiators in the u. K. And eu. Theres been talk about those a virtual meeting. Officials preoccupied elsewhere. Have u. K. Itself announcing secondary budget tonight here to 400 billion of support for companies. That now. Rioritizing the talks will be rescheduled. May happen again by teleconference. U. K. Were getting from the is the timetable remains as is. With or without a full deal. Entirely. Ill exit directly,johnson said said it again, if nothing is departs. Hen, the u. K. No matter what. That said now, the focus seems within europe and u. K. On the actual virus and effort to fight that. Government executive in london, thank you. Plenty more to come. Is bloomberg. When it comes to lot of people at home just playing the game. Thats right. One of the bright spots, amid the coronaVirus Outbreak has Online Gaming sector. You have millions of people across china confined to their ways toying to find pass the time that led to a big surge in terms of Gaming Business and adding millions of users. Their poker games have grown significantly because of the virus people have replaced real world games theyll be playing with friends and family over the holiday. Saw daily active use urs february. Than 100 in for peace keeper elite, that jumped more than 40 . Bit murky as people return to work. Usersnclear if those new will stay once the epidemic unsides. Peace keeper elite had strong the first few months outing i want to point that disruption had a massive impact on businesses across economy overall lead to dampening business. Ad lets talk about some of the other revenue stream. Example. Business, for are seeing any impact or potential boost from whats over laths coupl last months . F that means greater reliance conferencing, messaging and other online tools. Is toousiness collaborative and done very well. They were among the most apps on apples weeks. Tore for even though these apps are free to use, they do keep userrers their ecosystem and Enterprise Software still this unclaimed multibillion dollar area in china. Because of that, upgrade these ref in them. To 10cent rolled out many features lockdown period to help online program. Students across students signed up for online teaching programs. You so much for that. Thats it for Bloomberg Technology. Dont miss Bloomberg Technology sydney,t 8 00 a. M. In 5 00 p. M. In you watching out of new york. Bloomberg. Beyond the routine checkups. Beyond the notsoroutine cases. Comcast business is helping doctors provide care in whole new ways. All working with a new generation of technologies powered by our gigspeed network. Because beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected. To do the extraordinary. Take your business beyond. Is 9 30 a. M. Here in sydney. The market open is 30 minutes away. This is our future session shaping up. Nettie iven the for frenetic trading session on wall street. A search on expectations that President Trump and the administration could get bipartisan support to push through additional stimulus measures including cash handouts and additional moves from the fed as well. We are looking at a mixed a higher session across asia with futures in japan and hong kong looking positive. Youre watching daybreak australia. Lets get the first word news with rick a group. Gupta. Itika governments are preparing to spread to prevent the spread of coronavirus. That set stocks higher. U. K. Is offering a package worth 400 billion dollars and the bank of england will create a new letting facility. The u. S. Is proposing to spend more than a trillion dollars, the biggest Treasury Bonds rout since 1982. Travelers already restricted within the eu and the move that undermines the basic tenets of the sickle market. The latest measure is due to start as soon as Member States can secure their borders. Eu leaders admit the block is heading for recession this year. European banks have tapped one hunter 20 billion from the ecb as part of interim financing to prevent market stalling amid the virus. The cash was announced in a package of vtb measures last week that includes a rise in bond buying and favorable terms for lending. The ecb says the move will invite a backstop against the possibility of a shortage of liquidity. There are fears india could be as next virus hotspot infections rise and testing increases. The government has reported one hunter 37 confirmed cases and three deaths and has closed borders and tested travelers. 137. It is testing 500 people a day but is ramping up to 8000. Japans intention to hold the livex on schedule this year has been slams as insensitive and irresponsible, by member of the ioc itself. A former canadian hockey and player spoke after the government indicated the games would go ahead. That optimism has been damaged by news the Vice President of the japanese Living Committee tested positive for coronavirus. President trump has angered beijing by referring to the infection as the chinese virus. He used to the phrase in his own tweet, having earlier reposted a comment from a supporter. Washington and beijing have traded barbs about the origin of the outbreak. Secretary of state mike pompeo has called at the blue had virus all china says it may have been the will hand virus, walkon wuhan virus. Global news, 24 hours a day, and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. We continue to hear from the australian Prime Minister, Scott Morrison, speaking this morning in canberra. We are getting details in terms of the effect a public event cancellations will have. He had earlier said there would visits astions for one has shut down longterm care shut down. Get said that the Health Advice the government receive what that school should remain open. He is talking about potential for further economic stimulus measures saying theyre being considered by the government that will focus on cushioning impact for Small Businesses as well as welfare recipients. I want to bring in paul allen who has been watching this. What is that tone of what we are hearing, certainly a ratcheting up of concern . A lengthy and ongoing press conference, calling this a one and 100 year event. Files declared a Human Security emergency. The strongest measures he announced for the travel advisories, telling of australians do not travel abroad. That remains in place indefinitely. The department of Foreign Affairs says australians overseas should come home as soon as possible because travel is getting more difficult and they may not be able to return. Version today suspending all International Flights from march 30 until june 15th. Qantas has cut 90 of its international capacity. It is hard to imagine why qantas would continue to fly internationally. ,ther measures announced today restrictions lifted on 20,000 student nurses in australia. They will be drafted to help the health effort. And a ban on nonessential public gatherings. The indoor limits is 100. Essential public gatherings are defined as people going to the supermarket or at of health officials. The onto that, will be allowed. Much beyond that will not be allowed. The upcoming military celebration on april 25 canceled. Civil ausages sausage sizzle will not happen. Missed with Scott Morrison also telling australians to stop hoarding supplies. We have seen remarkable footage of toilet paper fights and the rest. What we expect tomorrow, a big day for watching for potential details about stimulus . Thursday circled on the counter. The cash rate going to end up on talk about quantitative easing and perhaps bond buying and yield curve control. A lot of speculation around this until we get the real news tomorrow. We have seen the Prime Minister saying perhaps more economic stimulus is on the way as well. When you compare to what australia is doing to other countries are doing, it is looking anemic. We might see developments there as well. Weve already seen really for airlines. 750 million four qantas. Virgin p regional airlines. A 50 million for qantas, version, regional airlines. Macquarrie group, equity strategy, worstcase the asx could fall 30 from where it is now. Potentiallyfallout as the story continues. Virgin airlines. Overnight saying the industry bailout could be a 200 billion. We are getting up date in terms of the number of confirmed cases. 454 cases of chronic virus detected in australia coronavirus detected and austria. Here is consider coronavirus cases in australia. We have seen a doubling of these numbers. It is likely will get worse. Theres been concerned about a shortage of testing. And announcements urging people not to turn up at the Emergency Department for frivolous things or being concerned or worried they might of something or needing to get clearance so their employer will allow them back to work. Hospitals have been reacting as well, to calm people down and say do not overwhelm the service with unnecessary requests. Thank you very much for that. We have breaking news. We are hearing media reports in the u. S. That the u. S. Chief of federal workforce has resigned. , according to plan to go, who says the Government Office of Personnel Management has resigned abruptly on tuesday for what people familiar with the matter says was poor treatment coming from the president ial personnel office. It is not clear at this point who will be the acting director of opm. We also have breaking news out of south korea. On thegetting the latest currency swaps. They will take steps to swiftly manage the fx swap market if needed. Y are preparing details detailed measures for the swap market. They had announced there would be implementing measures on fx forward, measures to ease domestic and foreign banks fx 250 ositions cap to 50 at respectively. More coming from secretary mnuchin warning the Virus Outbreak could yield 20 jobless rate without action. We have seen a tight labor market here in the United States going into this outbreak. But sec. Mooching warning this outbreak could yield a 20 jobless rate if there is no action. Secretary mnuchin. Ominous words coming from policymakers. Secretary minutes and warning the senate gop of this Unemployment Rate spiking. Lets get a quick check of the markets. I want to highlight what is going on with the bank of korea announcement. That was anticipated given the stress you are seeing and koran credit markets. We are seeing dollar funding charter just. Local funding facing deteriorating credit quality. We saw credit spreads wide into 47 basis points monday. South koreas measures to support forex swap markets were anticipated. In australia, Scott Morrison outlining fiscal stimulus details. We have the aussie dollar hovering around 60, rising slightly after a sevenday decline. The currency still trading at 2013 those, heading for parity against the kiwi dollar. Overnight and jump in the u. S. Dollar which rose to a threeyear high as we see dollar demand causing dislocations in forex markets. Lets check in on aussie bonds tracking the mood in treasuries which flirted with a 1 level, the aussie tenure jumping 15 basis points higher for a second day, about the 1 line. Lets check out the terminal for a snapshot of australian credit markets which have not been immune to the global liquidity crunch. The aussie dollar basis swap staying wide and Corporate Credit swap at levels we last saw in 2012. What we should be watching as australia gets underway in asia. The announcement that fx intervention, warning or consolation from the bank of korea being the latest. We are seeing moves in gold to the upside as well. What are you watching . And what was interesting to in that volatile market session overnight . This move in rates we have not seen for decades. The magnitude of some of these moves is continuing to catch people wrongfooted. The middle of last week we had this big rally in global bonds start to get tested as people were looking for a liquidity exit, and looking to get into some kind of dollars, which would allow them to sit tight during this volatility. We are seeing increasing moves that are showing. 36 basis points on tenure and 30 year rates overnight which speaks further to what you are ing in the liquidy crew liquidity crunch. At a huge supply pressure as it continues to come through with more stimulus from the United States government and other parts of the world starting to make this bond trade look tested. And the fact that market volatility remains incredibly heightened, expectations for that are for that to continue. It is not a position here were even if you have moved a significant part of your allocation, you comfortable and just waiting. There are still a lot of changes global asset allocators are having to make in this environment. Equities have had a decent rally in the u. S. At sets of the Asian Session to be reasonably positive. Some markets here yesterday had ago at summer rallies. We could see that followthrough. Had a go at summer rallies. Still a lot of uncertainty around stimulus and Health Containment efforts, there still people in the market who were uncertain about the future. Uncertain,is unprecedented market action, we are now seeing Traditional Market correlations breaking down. Yes, and in many ways that surprised people as well with the equity and credit correlations you have to play had and equities you have typically had, and equities and bonds fading somewhat. This speaks to the fact that people of not been able to rely on a additional labor that played out and for several, the 2008 crisis. Or crises in the early 1990s before that. Usehave not been able to the kind of traits that traditionally worked in the past. This chart in your dtv Library Shows it well. Library. It reinforces this idea that investors are hamstrung even if they have already tilted portfolio significantly, with such aggressive market moves and a lot of money still wanting to get out of the equity market. Even though you needs rallies, there are plenty of people who have not seen enough of a bottoming process in the equity market and want to see further tos to eps numbers completely slashes of capex plans and a reassessment of pricing even though we have had a huge price rate rating already in equities. A lot of uncertainty and more volatility to come. To check out our gtv library for some of those charts we are talking about. Next, we discuss what the outbreak has done to the market. This is bloomberg. You are watching daybreak australia. The coronavirus market volatility has meant more than sharp declines in equity prices. It has virtually shut down the ipo market for the next few months. To add up what this means for what was otherwise a promising year, lets bring in drew bernstein of Marcum Bernstein pinchuck which advises Chinese Committee seeking to go public. This could not have come at a more critical time on these Companies Need capital. Give us a sense of the ipo market now. It is challenging. Many companies are concentrating on being able to file on time. Those that are public. , there hasket now been a buildup of ipos. But you have not seen that many go right now, because of the market. One went yesterday in hong kong as we saw. You have not seen very many go and i would not expect that to happen for a while. Are companies postponing their ipo dates or canceling them all together . No. On 12 ands working almost all of them started prior to january. I have not seen that many new ones but there is a lot of uncertainty in the market now. Caused by many things. Not just a virus. So it is going to be interesting. It would be very competitive for this money. I think the need for the money has increased. Most of these companies during this. Have been losing money. So the need for capital is ever increasing. These companies during this time have been losing money. The investors are becoming selective. True, it is hard to imagine how unprecedented this is in terms of what needs to be done even when they eventually do get done. What are we talking about in terms of repricing or Financial Arrangements as valuations continue to change all the time . As accountants we do not get involved in the valuation. That is something done with the investment bankers. Actually sets the real price of the stock. , one, they have had the benefit of deals like we were and we work. They learned a lot from that. Like uber and wework. They started to hold comedies accountable for how did they make money. You have the virus. You also that u. S. Election in november. That is going to affect pricing. And timing of ipos. To hold companies accountable. Seen how much of you covenants Like Force Majeure come up in recent weeks . I have not really seen it come up very much. Interesting. Most of the companies we are working with now are working against tight deadlines to be able to file by the end of april. We have been able to get a lot of work done which is unusual, given the advancement in technology, we work with a lot of millennials today, so that has been very good, they brace technology. Embrace technology. The key now is going to be the ability to get fieldwork done, which has not been able to havent yet. Adviseso what would you these companies do as they prepare for ipos, or the pair eventually to propose pound them to postpone them. How did they get ready in this outbreak environment . It is an interesting time. Because it gives investors insight to how companies are able to run and manage themselves and peers of crisis. For example if a company is going to have difficult he popped filing on time it raises questions on does management have numbers . What are they operating on . How is information flowing . Today have good Corporate Governance now . Are they having good Corporate Governance . Onraises a host of issues how these companies are going to the able to meet and deal with the crisis. Most companies we are working with are doing pretty well, that are than i would have thought. They are leveraging technology as we are. To gethave not been able the fieldwork part of it. Is goinghe part that to affect the ipo market, because i do not think you will see too many of them until later in the year, probably after june. Haidi thank you so much for joining us. Drew bernstein managing partner at Marcum Bernstein pinchuck and you can get around up of stories you need to get your day going in todays edition of daybreak. Bloomberg subscribers can go to their terminals. And you can customize sue just get the news on the industries and assets that matter to you. This is bloomberg. Shery i am shery ahn in new york. Youre watching daybreak australia. Permanent ceo, effective immediately, he was serving as whenim chief since august the chairman ousted the previous boss. He takes over at a dickel time for banks amid the rising forecasts of recession. Singapores ocbc bank says it expects muted Revenue Growth this year because of coronavirus. The ceo told bloomberg, the bank is in the strong position in terms of Capital Funding and liquidity. And that he expects to quote this. Of turbulence well quote. By second largest lender assets. He has no plans to suspend the dividend. Retailere online planning to repurchase 2 billion up to 2 billion of its shares of the next two years in a buyback that represents 4 of its current market value. Jd says purchases will be made ad hoc at market price with existing cas cash to on Market Conditions. The most recent buyback was 1 billion in the summer, 2018. Bycoming up, will be joined hubbard Kennedy School of government professor reinhart. More ahead in the next hour of daybreak asia. For bloomberg day break australia this morning. At 6 , someg upside shorts get he squeezed in the kiwi market. Also we are keeping a watchful eye on ozzie kiwi flirting with parity again, matching the 2015 low. Both Central Banks rolling out measures to combat the spread of coronavirus and the impact on the economy. We are putting parity for the First Time Since the 1970s. The aussie coming under pressure given the demise of commodity prices. Cindy street extending losses despite frenetic, energized rally we saw on wall street overnight. Further measures announced by Scott Morrison does not seem to add positive sentiment. This is bloomberg. When you move homes, you move more than just yourself. Thats why xfinity has made taking your internet and tv with you a breeze. Really . Yup. You can transfer your Service Online in about a minute. You can do that . Yeah. And with twohour Service Appointment windows, its all on your schedule. Awesome. So while moving may still come with its share of headaches. No kidding. Were doing all we can to make moving simple, easy, awesome. Go to xfinity. Com moving to get started. A very good morning. I am haidi stroudwatts. Markets have just come online. Japan and south korea opening. I am shery ahn. And i am Sophie Kamaruddin in hong kong. Welcome to Bloomberg Markets asia. Our top story this wednesday, governments working to beat the spreading virus. There could be 1000 handouts. It continues to damage chinas economy. The outbreak crippled factory activity. Increases thea heat, ramping up oil experts to a record 10 billion barrels a day. The kingdom determined to win the price war. We are seeing primaries not only in florida, but arizona and illinois. Vice President Joe Biden leading in those poles. Florida is the biggest prize with 219 delegates. We will give you more as we get those. Lets get you a quick check of the markets. Sophie checking in the open on sydney come after the best session for since 1997 for led by 200, laggards exporters this morning. Very few on the up. Markets digesting fiscal stimulus measures announced by Prime Minister Scott Morrison. He said more can be forthcoming as they assess the economic impact. Have kiwi stoxx containing continuing up 6 . Could be a down day for tokyo when the session starts there. Lets check in on bonds. We see a move, given the treasury move we saw overnight. The 10 year yield in australia up 14 basis points, 1 . The yen holding above 107. Dollar around 60. Low, now up. 2003 u. S. Futures under pressure. Movets consider the feds to unleash more Crisis Management tools and Steve Mnuchin caution to the Unemployment Rate in the u. S. Could jump to 20 without action when it comes to containing the virus impact. Basis swap, we did see tightening when it comes to the eurodollar swap after the fed unveiled commercial paper facility. We are seeing a retreat when it comes to the yen after the tightening we saw when the boj had its allotment of fed stock lines the most since 2008. Sheryanh so much on the impact of the virus and how it is affecting the global community. Dr. Carmen reinhart, harvard Kennedy School of government, thank you for joining us. We see more and more news of more countries locking down. We are hearing San Francisco now sheltering in place, new york could be next. It seems the Global Economy slowly and gradually shutting down. Have we ever in history seen such a thing happen, and what can we expect for an economic rebound following the peak of this outbreak . Tomen the short answer historical antecedents is no. Before,had pandemics and even severe ones, but the policy response of social distancing, closures, the suspension of any kind of crossborder communication in terms of trade and passengers and so on, this is on a different scale. What can you expect . Immediately before talking about recovery, it is a very sharp drop. I think an eyeopening kind of drop in economic activity, which in my expectation, surpasses anything we saw in 2008. Sheryanh is this panic we are seeing in the markets justified given the severity of the situation and how bad it could be . Carmen it seems panicked because volatility has been off the charts, but the fact is, the markets are driven by uncertainty. We do not have uncertainty on the depth or duration. Severity, this magnitude, can mean what started out as a medical emergency can also become, can morph into, a financial crisis. Haidi does it matter to you that if we do get a recession and the slow down comes from this, that it comes from the government essentially shutting down the economy, would prevent the outbreak as opposed to a more organic or structural issue with the economy itself that creates a recession . Initially, if the outbreak is controlled in time, what youre talking is otherwise healthy institutions, healthy financial institutions, healthy businesses. Ofthe duration is modest, course it matters. But if it persists, then you lacky run into the classic of income, lack of credit. Very substantive government interventions and centralbank interventions, my expectation is it will be hard a big pickup in corporate defaults and business closures. Carmen, what in your view is the best way to deal with what is a terrible situation, in terms of different approaches that have been taken around the world . Is it better to have a shorter, sharp, painful shut down like china for example, like italy is being forced to do, or is it better to try and create a gentle cushion for the economy the way we have seen perhaps here in australia and the u. K. . I think you try to create a cushion but also cushion in terms of slowing down the outbreak. That is the critical part from the medical standpoint. We do not have the facilities to of cases a major surge all at once. Thinkhe economic side i the largescale measures to that we deal with problems that range from the Manufacturing Sector to the Service Industry will no doubt severity, but it is expect theyask to could deal with all the dislocations going on. Sheryanh in those efforts to slow down the spread of the virus, are we calling an end to globalization as we know it . Look, at this moment globalization has been on a downtrend since the Global Financial crisis. Volatile trade, growth, which averages 6 a year in the decades before the Global Financial crisis, we never recovered from that. The growth in trade slowed to left less than half what it was before the crisis. Then came brexit, then came the chinau. S. Trade war, and now we have this major shock. I do think the real disruption to International Supply chain, to the International Flow of capital, is going to have lasting effects. Another big notch down myglobalization that in view, does not look like it will anytime soon. As we continue to see these efforts by the Central Banks to provide liquidity to the system, give us your assessment of how good of a job they are doing and how much more needs to come from the government and how much more can come from the government, how much room do fiscal authorities have to really unleash measures around the world . Room isthe question of very countryspecific. Take a case like the very extreme outbreak we are seeing in italy. Italy is clearly a country where the concept of fiscal space is nonexistent. In the case of the u. S. , the as. , china and korea, examples, fiscal space is on a different scale. It is hard to answer that question in one fell swoop. There is a lot of heterogeneity. In terms of the monetary response, i think what we have to recognize is that the problem in the originate Financial Sector as it did in 2008. A lot of the problems we are going to be seeing also require unconventional policies that supportolve providing for medium to Small Businesses as well in a way that is much 2008widespread than in the crisis, which we may very well see. I am hoping to see more to that effectge from the Federal Reserve and Central Banks. To usely allowing banks as collateral a lot of the loans, banks to businesses, that have been paralyzed by the outbreak. Professor, in terms of Going Forward, where would you be looking in terms of concerns over institutional weaknesses . Or can Global Leadership and institutions we have deal with an unprecedented situation like this . We are dealing with a situation in which it is impossible to have rules of thumb. Thequickly and effectively the existing authorities are capable of happen handling it. It also depends on the duration of the shock. We see in terms of containment is more like what we ive seen in china or korea, think we are much more well poised to that. If one were to have a much more lingering problem, then i think we are off to a different game. Carmen, thank you for joining us. Professor atrt, the International Financial system at harvard Kennedy School. Virgin australia we have edging higher, but languishing near record lows for the share price as the carrier seeks to cut domestic by 50 . 53 aircrafts. Ng they are in talks with unions to avoid layoffs. It was already downgraded to b. Shares,eck in on qantas lower by 8 after opening at 287. Investors assess the australian million relief package. Will this be enough . That is the question. They predict bailing out the Global Airline industry will cost up to 200 billion as the sector faces bankruptcy and earning risks. Tas, bloomberg estimates they will post a one billion aussie dollar halfyear loss and with outlook sharing, Morgan Stanley cutting price targets by 14 . Sheryanh thank you lets get the first word news. There are fears india could be the next virus hotspot as infections continue to rise and testing increases. The government has reported 137 confirmed cases and three deaths. They have closed borders. They are checking 500 people a day. The Prime Minister ramped that up to 8000. They say there is an avalanche of new infections on the way. Japans intention to hold olympics on schedule this year has been slammed as insensitive into responsible by a member of the ioc. Former canadian hockey player spoke up, indicating the games would go ahead. Beener, that optimism has damaged by news the Vice President of the Japanese Olympic Committee has tested positive for the virus. A downgrade of economic performance. Say this analysts court of coronavirus kept people at home and manufacturing shut down. Year on year growth of three point 8 , down from 4 seen monday. Growth is now at 5. 4 . Kongsonavirus in hong Unemployment Rate to its highest level in eight decades as the infection further hurts already struggling companies. The rate hit 3. 7 from december to february, the highest since january 2011. Five straight months of rising unemployment extends the longest such run since the financial crisis. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Sheryanh democratic primaries ago on. Polls closing in arizona. Haidi plus, the outbreak weighing on business ties between the u. S. And europe. Italyamerica chamber of Commerce Executive director joins us. This is bloomberg. This is bloomberg. We expect to maintain the rate at this level until we are confident the economy has weathered recent events. Pres. Trump it makes me very happy and i want to congratulate the Federal Reserve. It is all the fed can do. We call it a kitchen sink move. And comesets to peak down, pressure eases on markets. Haidi polls in florida just closed in the latest batch of democratic primaries in a bid to unseat donald trump as president. Lets bring in Kevin Cirilli. A highere meant to be interest a set of primaries but the coronavirus limited turnout. What are we seeing and expected . Kevin not only that, there are questions whether or not the primary should be taking place at a time every american is being urged to stay put and hunker down and be socially distant in order to flatten the curve of a Global Pandemic. The Democratic National Committee Chair put on a statement earlier this evening and said they are urging other states to extend their access to mailin voting and early voting. That is precisely where i want to take the conversation with the former senator. He joins us via skype and is a advisor. Consulting thank you for being here. Campaign manager to the late great john mccains president ial campaign. We expectf what tonight, what do we expect in terms of who will win the whethervote, but also or not the primaries are going to continue amidst the backdrop of the pandemic . You get a sense from the polling data Vice President biden will win at least tonight and that theme seems to be continuing. I think you will see less voter turnout because people do not want to go out in these conditions, they want to limit their access in florida, which has a high population of older folks that vote. They may not want to be going out. It is ar thing i think, mixed deal. A lot of people are home so they are watching news and getting a lot of information, so they are hearing about the coronavirus, but also about the elections. People in an odd way will be more informed about the elections because they are stuck at home or in isolated areas where they are watching tv or listening to radio or cable. I think turnout will be lower than expected, which is not a good sign when you want people to participate. I can tell you in anchorage we have a municipal election scheduled for april 7 and we have mailin ballots. There is a campaign coming through right now, stay at home, stay safe, vote by mail. That is what is happening in. Nchorage right now people do not have to be out in large groups. Said washe senator interesting, how the pandemic may change the way in which people vote. Who politically will emerge tonight . At what point do democrats rally behind a candidate to face a number . I think they already have. When you see the trajectory, the Democratic Party rallied around joe biden and carried him to an amazing victory in super tuesday over the entire field. The field consolidates and now you have a oneonone race with Bernie Sanders and all indications are tonight that it will be a sweep for joe biden. I think that is a foregone conclusion. The party made a decision on who the nominee will be. The question the senator raises is a good one. Can they maintain enthusiasm that existed just a couple weeks ago, through the coronavirus haze of this election . It is not enthusiasm, is it safe to go to the polls . One of the things we were all cussing about the mailin ballots a few weeks ago when we said, look at how quickly this election has changed and the people in california who voted a month ago will not have the benefit of this win in south carolina. Now we are saying, thank god for mailin ballots because it is the only way you can vote. And washington state, the only state which requires an all mailin ballot. Should the Democratic Party get together and say, we are going to put off all primaries until at least the summer . I think there should be some on in person primaries. Our president ial primary, scheduled for april 4, we went from a caucus last time to now are primary, to a mailin ballot. I just mailed mine in last year last friday. We have to rethink how we do elections. You think about the news you , all the manipulation of election boxes and where people can vote. The simplest way to solve that, let people mail in their ballot. Everyone gets access and you do not have to worry about these types of situations, but also the potential increase in turnout. Turnout untilless they can feel comfortable in the public arena, but that will not until for some time Health Directors say it is safe to be out. Wordld still use the enthusiasm, because i think people were excited coming out of North Carolina south carolina. Suddenly, tuesday it went crash. Now they want to get through the primary and see what happens. I would rather push. The big question, what will we do about conventions . Lets talk about turnout. It is more complicated than who shows up on election day. I have no doubt the coronavirus and peoples efforts to take care of themselves and others will lower election day voting today. That makes total sense. But in cook county they had a Record Number of requests. Since world war ii, the highest number of ballot requests for absentee in almost 100 years. Vote inna, 80 already absentee ballot or by mail. It will be interesting to see. I think it is a foregone conclusion who will win, but it is interesting to see if the kind by mail show of enthusiasm they have been showing. We are going to have to leave it there. The economic plans both candidates, joe biden as well as Bernie Sanders, are talking about, and how they have to be careful not to mixed messages coming from the current administration. Folks are still getting that information and the Pandemic Development is changing in real time. Back to you. Thankanh Kevin Cirilli, you. Senator sanders speaking on time online at the moment. Lets get a check of the latest business flash headlines. Softbank pulled shareholders of draw ait could with purchase that was part of a deal to rescue struggling wework after its failed ipo last year. Softbank also already invested 1. 5 billion in october. It is set to close in two weeks. Is prioritizing household staples and medical supplies as customers avoid physical stores. It aims to keep warehouse is supplied and is not accepting orders for nonessential items. They are finetuning operations to deliver things people want now, keeping overall sales high. 100,000 looking to hire extra staff to cope with demand. Jd. Com planning to repurchase shares over the next two years in a buyback plan that represents 4 of its current market value. Besays the purchases will made ad hoc at market price with existing cash depending on Market Conditions at the time. The most recent buyback was for 1 billion in december 2018. Coming up, 1000 or more to americans in two weeks. President trumps big stimulus plan is next. This is bloomberg. G. This tension we are seeing in aboutrkets is a concern what is going on in the credit markets. Percentu look at the decline we have seen in the s p 500, typically when you see declines of that magnitude, they are fully discounting a recession. One of the problems we are having in the market, you look at the export examples at record levels, it is not just pricing in economic recession, it is pricing an extraordinarily weak liquidity. We have to make sure the cost to credit is low to bolster demand to support income. We are facing world war iii for 90 days. It is not five years. The banks will not be under too much strain if we are talking 90 to 120 days. Maybe we should turn the markets often get through this. Conditions as they stand the dollar has been on the front, help and by the steepening [no audio] the Prime Minister is expecting to see the cash trade get to. 025 . We may see some bond buying. We are waiting on details from those the bank of australia. Their treasury has been joining the push for an extraordinary meeting of g20 finance ministers by phone. That will be i think the february numbers that you are referring to were on the weak side but they were not disastrous. That. Er some of it was just a sharp decline in prices. Nevertheless, this shows that consumers were not particularly strong in the month of february. This is before the number of cases accelerated. We will see retail sales month. Y going up in the everybody is stockpiling. Will see as over, we sharp drop in the second quarter. Bloomberg economics senior economist. Lets go to riddick a group to for the first word headlines. The European Union is closing its external borders for 30 days in a lastditch attempt to slow the coronavirus. Travel is already being restricted within the e. U. In a move that undermines the basic tenant of the single market. Latest measure is due to start as soon as members states secure their borders. Banks have tapped 100 20 billion from the ecb as part of the interim financing to prevent markets selling amid the virus. Will provide an effective backstop against any possibility of a shortage of liquidity. Saudi arabia is to boost all exports in april and may 2 a record of 10 million a day. Kingdom confirms it is determined to fight a price war with moscow. Is below 30 and planted Energy Majors to consider spending cuts before the price war. 7 Million Barrels a day. 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. This is bloomberg. Shery haidi thank you. Coming out next, we will take a look at italy. How the coronavirus is impacting businesses amid the shutdown. America chamber of commerce will be along with us. This is bloomberg. This is daybreak asia. I am shery ahn in new york. And i am haidi stroudwatts in sydney. Nations have been hit by the coronavirus, 28 billion dollar package to help soften the economic impact. Joining us to discuss is the chamber of commerce director, Federico Todd z tozzi. Give us an indication of the conversations you have been having among your membership. What is the feedback so far for this crisis . Federico thank you very much for having me tonight. Beenu know, italy has ,evastated by the coronavirus we have been talking with. Embers in contact with italy they are worried about the situation for sure. A bumpyalk road when you look at the Expert Community in the United States coronavirus has been devastating. Side. On the production there was a lot of uncertainty. People are locked down. Control. Have it under it keeps growing. Peak and seereach a decrease in those cases which would bring a more positive both for the citizens and on the economic side as well. We are still looking at what is happening right now. The industry of italy has been touched by this pandemic, the tourist injury, the travel industry, the travel industry. , the fact travel ban that you could go there and get , it is having a bad effect. We have a lot of members in the travel agency that are seeing the cancellation. Toot of people do not want travel at this point. Tell us about the businesses that have been hurt, but also other businesses that have increased demand, especially coming from the u. S. A lot of people are panic buying at the moment. Federico one of the major exports from italy to the u. S. Is specialty food. We have seen a change in demand from products. We have a longer shelf life. People are buying as much as they can, pasta, any product that can be stored for a long time. Is positive in this time. Hopefully there are other which can be sold daily from italy. Cheeses. S of because therering is. All of these products were flying on passenger planes. There are no direct flights from italy anymore. There isfor that so companies are suffering. Obviously tourism is the most Immediate Impact of the shutdown, but in terms of the types of trades, the industries that will be worst hit, what are you expecting . I think there will be a permanent impact on industry. Place where a lot of International Industry takes place. Especially in certain fields like design. We have an exhibition in milan that has been postponed until june. We do not know what will happen in june at this point. [indiscernible] there is an exhibition for wine, one of the biggest in the world, possibly postponed. Ist we hear from producers that they are questioning if that show will go back to what thesed to be, considering long run. Say what we hear from membership, there will be change in the supply chain. They are going to produce in the food business. We give to the consumer a better understanding. Thank you very much for your time today, federico tozzi. Lets get a quick check of the latest business flash headlines. T halting carpal services to slow the spread of the coronavirus. Services inspending london and paris. The company says hailing operations such as Food Delivery Service will be available. Ride hailer isan expanding, despite coronavirus jitters, to compete with grab. Grab are aiming to forme the regions go to everything from food delivery to mobile payments. Slashed tesla car production. The government move to ensure the shanghai factory received at least 10,000 masks so they can reopen when local rivals were still closed. Tesla was able to resume production in china in the fourth day after the Lunar New Year break. We are getting breaking news out of japan. What it is going on when it comes to the sovereign bond market. 0. 015 , the highest since january 19. We are getting readings when it comes to trade for the month of february, exports, a delight decline of 1 . That is better than estimates of the decline of 4. 2 . That is a year on your number. When it comes to the trade that is also slightly better than expected. When it comes to imports, a contraction of 14 on expectations. I want to give you the breakdown. Exports declining 0. 4 . February s exports, a massive decline of 7. 7 and a fall of 2. 6 when it comes to exports to the u. S. The china number not as bad as expected. We will wait to see what march numbers come in at. Japan, 10 year yield rising to 0. 015 , the highest since january 2019. This is bloomberg. Is bloomberg. Sheryanh this is daybreak asia. I am shery ahn in new york. Haidi i am haidi stroudwatts in sydney. Buy 3 billion ellen is in San Francisco with the details. What do we know so far . Softbankw that today sent a message to shareholders that the tendered offer they expected to receive by april 1 could be on hold and they cited several reasons for doing so, including some of the most newsworthy aspects, they confirmed several different inquiries from many different agencies, including the sec, new York Attorney general and ones from the new York Attorneys office, and District Attorney of manhattan. What do we know about softbanks intentions . Would they perhaps negotiate the price down or completely withdraw the offer . It is hard to tell, but it seems like a bargaining move were softbank is trying to put to bend aboutwork something related to this deal. Big is a part of the softbank bailout last year which helped them stay afloat. After the failed ipo they were almost going to go under. They were running out of money. Softbank came in a negotiated deal, included an advance equity investment. Offer wherender softbank was willing to buy up to 3 billion in wework shares. One billion of that was to go to adam neumann. This was his much discussed bailout package. That still has not closed. The date has been set at april 1. This is softbank coming out and saying, we have concerns about some of the things going on in the company, including from these investigations as well as other things they mentioned in the email. Not gosaying we may through this unless it is addressed by the deadline. Move to get like a an upper hand in negotiating. You with the latest on softbank and wework. The markets are opening in tokyo and seoul. Sophie, what are you watching . Higher nikkei futures and the asx 200 falling as much as 4. 3 . Sliding 50 ass the Australian Government warns against overseas travel. We are waiting on more aggressive moves from the rba. Jumping to the terminal we saw them deliver another cash injection, a record 10. 7 million, following a big jump in liquidity. The rba has been seeking to calm funding stress. We will be watching reaction to the bank bill which has rallied sharply over the past week and we are seeing a pickup at 2012 highs. Haidi coming up the next hour of daybreak asia, the head of asia strategy joins us as the markets open in japan and south korea. Plus, holding the Tokyo Olympics, is it irresponsible . We get more on that with the japan chairman joining us later. We are just getting breaking the u. N. It comes to virus plan, warning of a potential 18 months pandemic and shortage according to reports. We will get you the very latest. L get you the very latest. Good morning oh no, here comes the neighbor probably to brag about how amazing his Xfinity Customer Service is. Im mike, im so busy. Good thing xfinity has twohour appointment windows. They have night and weekend appointments too. Hes here. Bill . Karolyn . Nope no, just a couple of rocks. Download the my account app to manage your appointments making todays Xfinity Customer Service simple, easy, awesome. Ill pass. Can you help keep these iguys protected online . . Easy, connect to the xfi gateway. What about internet speeds that keep up with my gaming . Lets hook you up with the Fastest Internet from xfinity. What about wireless data options for the family . Of course, you can customize and save. Can you save me from this conversation . That we cant do, but come in and see what we can do. Were here to make life simple. Easy. Awesome. Ask. Shop. Discover. At your local xfinity store today. A very good morning in sydney. Asia major markets have just opened for trade. Welcome to bloomberg daybreak asia. Our top stories this one second my governments about to spend heavily to secede the spreading virus. The u. S. Package could top trillion dollars. The infection continues to ravage chinas economy, indicating a sharp contraction theertain as Outbreak Forces factories to close. Voters the find the virus in three major states define the virus in three major states. What we are hearing right now, ap calling the Florida Democratic primary as the win for the former Vice President , joe biden. The floridainning democratic primary. Florida is the biggest prize, with 219 delegates. We have seen primaries in arizona, florida, and illinois. In fact, the primary polls closing in arizona at the moment as well, and joe biden winning the Florida Democratic primary, the biggest prize today with 219 delegates. We have breaking news. Oil now trading below the lowest settlement since 2003. This, coming as we continue to betweenflood of supply saudi arabia and russia. The brent, trading below 30 a barrel. 1. 6 , about 26 a barrel. Lets get straight to the market with sophie. Sophie we are seeing the nikkei 225 adding 2 10 of a percent. Movements,re seeing being flushed out after Stephen Mnuchin spoke about the possibility and a spike in employment being excessive aided by the virus. Year yield, rising to the highest level since january of 2019. We also have the latest to digest from japan. Lets check out korea. This morning, we got the bank of korea announcing measures to by 25 e cap on banks for march 19th. Markets are seeing stress for korean companies. Is firmer by a touch, by about 2 10 of a percent. With australian markets, we are seeing downside moves by as much as 4. 6 . Want to shares quantas shares, flooding. The aussie dollar, back below 60. We are seeing a pickup in aussie yields by about 14 basis points, both the australian and new zealand bond yields continue to steepen, but we are seeing gains for stocks wellington. Sophie kamaruddin there in hong kong for us. We are just getting some news that asia has suspected their service at least until april 15th, building on a number of the actions being taken by airlines given the complete destruction and demand for air travel. In fact, we had the australian Prime Minister speaking to us earlier this morning. News. Go to the first word australians have been told with theavel abroad, Prime Minister declaring a human by a security emergency. The level 4 advice gives Authority Special power to deal with the emergency. They called the outbreak a once in 100yearold event and said it would last for at least six months. They have reported 450 cases of coronavirus in australia. The travel advice to every australian is do not travel abroad. Do not go overseas. That is a very clear instruction. For those of you who were thinking about going overseas for the school holidays, dont. India could be the next testingrus hotspot as increases. They have reported 137 confirmed cases and three deaths and have closed borders and tested travelers. They are checking 500 people a day with a plan to wrap that up to 8000 ramp that up to 8000. There is an avalanche of infections on the way, it is said. Trump used the phrase chinese virus after posting a comment from a recorder. The secretary of state, mike pompeo, has called it the wuhan virus. The country says it might have been brought to china by the u. S. Military. The former canadian hockey player, haley, said the games would go ahead, but that optimism has been damaged by news that the Vice President of the Japanese Olympic Committee has tested positive for the virus. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Thank you. The japanese market, gaining ground at the moment. There is one stop bucking the trend. Lets turn to sophie. Sophie that is the heavyweight softbanks leading this morning by as much as 3. 5 , no trading 2019 lows. Casting doubt on the deal set to close in about two weeks. It looks like more downside for softbank. Lets get more analysis on what is going on with markets. Cb head,oined by the a ms. Victorino. What do you do in these times . Right now, all traditional correlations have broken down, which is very typical during crisis periods. But at this point, dollar really is king. Squeezese liquidity occurring in the market is really because everyone is running for the dollar, and the market is not even looking at thefundamental drivers of currency. They are not looking at the differentials. They are seeing a lot of market dislocation. This time, it is really go for the dollar. That is interesting that you should say that. Thebelief that we hold when market functions as it normally does, there is a since seen volatility in the yen, volatility in gold. Does the traditional still apply . I worry about the strength of the dollar Going Forward. Right now, the structural driver for gold, they are still correct, but we are not being driven by structural issues at this point. And really, as far as gold is concerned, gold already started to go up in june. Week,least until last gold was really on a tear, but when you really have risk control, looking at portfolios, and there are a best of losses in other parts of the portfolio, then it is just inevitable to lock in the process to fund some of those losses. And that is actually what i believe has happened with the gold. Which is a white out of positions. When it comes to the Chinese Markets, we saw a relative resilience during the coronavirus operate, but we are seeing it more coronaVirus Outbreak, but we are seeing it more and more under pressure. Given the horrible chinese data we got recently, where will Chinese Markets go if we do not see more aggressive Monetary Policy measures coming through . Because really, we are expecting their mediumterm Lending Facility to do something, then nothing happens. Indeed. I was very surprised that the official statistic for january and february, we were allowed to show deeper contractions. The truth is, none of the sales,ors, retail investments, none of them have really posted contractions forever. So this tells me that the chinese authorities are likely to show a deep contraction for q1. Arear as equities concerned, at this point, the market is already discounting instability in china. By the time the q1 that is released, which is sometime in april, q1 activity will have already showed some stability. The market will not have been pricing and what happens in the future. Compared to the rest of the world, china is actually, ironically, with stability. It sense to me that given what is happening right now with Monetary Policy makers in china, what they are doing, and the strength of the u. S. Dollar, the does does that mean the one is going to weaken . Yuan is going to weaken . If you go beyond dollars, you want exchange rates. Has beeny, the yuan depreciating against trading partners. When you compare the trajectory of dollars you want versus the remnant the index remnant be remnant be minnen be index, it is stable to the rest of the world. Assetslong do chinese remain a bastion of stability or a safe haven when we continue to see the trend of diminished external demand . We are now getting estimates from the likes of Goldman Sachs and other economies that the euro near gdp number is likely to be nine and prevention it is very difficult for me to imagine that there will be a year on year contraction in chinese gdp, because at the end of the day, year on year contraction is a cumulative probe of the past four quarters. So if you consider that q2, q3, and q4 of 2019 have already provided a cushion, no matter how deep the q1 probes will be, growth is undoubtedly in the growth, but the annual growth will still likely to be around 3 , maybe 2 . Thank you very much for joining us today, eugenia victorino, seb head of asia strategy joining us from singapore. We will be joined by other guests. Still ahead, the ioc insists it is still committed to holding the tokyo games this year despite what it calls an unprecedented situation. Up next, the latest on the democratic primaries and how the coronaVirus Outbreak is playing out across the campaign. We are live in d. C. , just ahead. This is bloomberg. This is bloomberg daybreak asia. Theoe biden has won democratic primary in florida, the biggest prize among other primaries in illinois and arizona. Kevin cirilli is with us as results come in. Where does this but Vice President joe biden put Vice President joe biden in terms of the nomination . Florida is such a key battleground state in terms of swing vote for both republicans and democrats, so for now, joe biden gets to add that to his dominant delicately. Well expected to do quite in arizona as well as illinois. Lets talk about those results with the senior Vice President of rock solutions, also the former Deputy Communications director and National Press secretary to the National Democratic committee and Bloomberg Contributor and Campaign Manager for the late senator john mccain. Statea is such a dominant in terms of the white house mark. At what point does it get tricky for senator Bernie Sanders to continue onward . That is a great question, kevin. Right now, the primary is expected to be over. You said the delegate map makes it clear this is a done deal. As soon as you get the majority of the delegates moving forward, Bernie Sanders would have to win to capture the nomination. Unfortunately, joe biden is projected to win every state Going Forward that has major delegate hauls. What point does it get more difficult for senator sanders . Right now. Mark is correct. If he winsht, biden, out, he could have over 300 delegates advantage. It is almost impossible to make up. I would say, too, the selection is frozen. The coronavirus has stopped any dialogue that would create a change in this race. And the good news for Vice President biden is, it was frozen in his advantage. Is that your consensus, as well, mark . I think you have to look at the momentum that biden has acquired over the past couple of contest. Couple of contests. Debate, forthe last example, Bernie Sanders won last time via landslide. By a landslide. He has been able to grow his base. It would have worked if the field was much bigger. If the moderate wing of the party was split up, but unfortunately senator sanders finds himself in a tough spot right now. If you were advising you advising a president ial campaign leader, think back to when you worked with senator john mccain, i remember when he suspended his president ial campaign to come back to washington to grapple with the economic disaster. Right. Should biden and sanders do the same thing . Think the party should really address it, too. They are the combatants, but the rules are set by the party. They are supposed to be the arbiter of the playground. Look, the to say, to,s we are exposed after tonight, joe biden could be the nominee of the party, they could change the timetable and what happens Going Forward to alleviate some of the pressure that is on people to have to participate in the selection. I know he was a nominee, but john mccain was not waiting for the party to nominate them he said i am going to suspend my campaign, go back to washington. Vitality ofconomic the country ahead of his own political ambitions. You hear that, and my question to you would become a do you think it is time that biden and sanders come together . Dnc the would the chairman come up with a consensus plan is the nation continues to grapple with the pandemic . It ishink that the party, pretty will united on this front. In terms of trying to come up with policies. It makes sense. You are seeing this sort of different in the way that people view this situation. Right now, they are questioning a little bit. They are questioning a little bit President Trumps leadership on this. It is important the party come together behind the plan that is going to help our country right now. We are at a historic moment. We have never faced anything like this. It is important that they do that. Do you think eventually every primary is going to be delayed . Conventions being delayed, conventions being impacted . What are you hearing from the dnc . It is still very early. You obviously have different states and different governors reacting different ways. One governor for example, having postponed the primary, i should say, making this a Public Health issue and pushing off the primary a couple more weeks. I think every governor is going to make a different decision based on what is happening on the ground. It is too early to tell right now what is going to happen. In the minute we have left, how would you advise a campaign to keep moving forward . You cant have folks knocking on doors. To ask for money at a time like this you cant have a rally. His campaigning even appropriate . Is campaigning even appropriate . Really, it is a campaign where i think if i were advising the biden camp or the sanders camp, i would say lend whatever assistance you can to the effort to try and galvanize the nation, the proper behavior around a pandemic, and let the chips fall where they may. For sanders, that moment is going to be in the u. S. Senate. You announced tonight he is going to stay in washington and get some of his proposals and this bailout package going to the senate right now. And i think joe biden, because he has a great megaphone and is respected around the country and frankly around the world, he should make his voice known in order to help stabilize the situation. I just saw a headline crossing the bloomberg carnival joe biden has terminal that joe biden has just won the illinois primary. I want to thank the senior Vice President at Stock Solutions and the former communication and formerr the dnc advisor to the late senator john mccain. Back to you. Thank you for that great conversation. Kevin cirilli with us in d. C. Confirmation that joe biden has won the illinois democratic primary. You can watch us live or catch up on past interviews on tv go on tv. You can join the conversation and send us instant messages during our shows. You can check it out at tv. This is bloomberg. This is bloomberg daybreak asia. Lets get a quick check of the latest business flash headlines. Plunging demand for air travel is radically reshaping avi shin reshaping aviation. The infection is likely to mean many carriers will fail. Governments have indicated a willingness to help with italy. Lanning to renationalize a company says workers would help workers for now, but hotels are to expect fewer people. Softbank has told we were shareholders they can with the draw from an agreement to buy 3 million of the start of stock. This was part of a deal left of the failed ipo last year. The latest deal has been set to close in about two weeks. Of theext, as the fate Tokyo Olympics remains on edge, we speak to the japan chairman, christopher lafleur, about the sentiment of businesses there. This is bloomberg. This is bloomberg daybreak asia. Governments around the world are preparing to spend heavily in the face of the spreading coronavirus. The allocation of more than 200 billion since european stocks higher. Worthng a package almost 400 billion. The bank of england would see will see a new lending facilities. The u. S. , sparking the biggest bailout over a trillion dollars. Government intervention, the Unemployment Rate could soar to 20 . The fallout could be worse than in the financial crisis. Y urged to act swiftly and financial assistance. Thanks and analysts say the mainland will contract this quarter as a coronavirus as a coronavirus causes many french during to shut down. Fouryear growth is now up. The hong kong Unemployment Rate is at the highest level in a decade. 3. 7 in december through february, the highest since january of 2011. Five straight months of rising unemployment is the largest such run since the financial crisis. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. This is bloomberg. Thank you. Lets get you a look at how markets are faring at the moment. Sophie after a fiveday decline for the chinese regional index. Or equities, a pickup quantas, slumping as the Australian Government warns about overseas travel. Take a look at the currency space. You have king dollar retreating from a threeyear high. About 107. Lding the korean won, seeing the biggest rise in a week. Yuen,ore you win, staying above the seven handle. Iwi yieldsaussie and k off 19 basis points for the benchmark. We are seeing a pickup for treasuries. Still seeing above a 1 level. With futures, you have the s p off by more than 2. 5 . Another weird day for global stocks. We are seeing massive swings across the board. We have seen gyrations for Australian Shares and liquidity issues at the heart of this concern with deteriorating credit quality for companies and stressed out funding markets. That has policymakers stepping in. The rba, injecting more cash into the Banking System while markets are pricing in more ease. Qe, also on the radar. Rules held byg banks to prompt more lending. The highest tick up since 2008 on tuesday, the boe and ecb will be tapping the fed swap lines. The nba, reportedly raising its credit line to 1. 2 billion given concerns about the virus. The international Olympic Committee is saying it is still committed to holding the tokyo games this year, though it does anowledge it is in unprecedented situation. It is to start and fukushima on march 26th, though some parts of the route will be closed defense. Christopher lafleur, American Chamber of commerce in japan chairman joins us from tokyo. What are you hearing about holding the olympics in tokyo . A global infection if the global infection continues at this right, nobody is going to go to tokyo anyway. Does it not make sense to just postpone it . Think everybody understands at this point that we are indeed an unprecedented situation and really have to take some time here to see how this is going to develop. It will probably be premature to make any absolute decisions. We have to wait and see. How have the japanese government officials coordinated the virus response . What are you hearing from your members . You will recall that early on in this crisis, as it expanded out of china, japan was criticized and a lot of quarters for its handling of a cruise ship that docked in yokohama. Since that time, but we have seen in japan is different from what we have been seeing recently in europe and the u. S. The number of cases has been growing, but in a much slower rate than elsewhere. Japanese clearly have been doing something right. Maybe it is the fact that they facemaskso wearing due to overcrowding. The rate of increase here is moderate, and some of the very strict steps that are being discussed and implemented in the eu countries and beginning increasingly in states in the u. S. , we really have not quite gotten to that level yet here in japan. But it is affecting business. The inability to travel, the difficulty of planning, some suppliers and customers and clients beginning to be unable to maintain normal business operations, all of that is having some effect on our members. So what the government is talking about doing to support the economy will i think be increasingly important to our members as well. What could the government of japan do at this moment to provide assistance to small or midsize businesses . My sense is that pretty much everyone agrees that speed is one of the most important things here, because if we are indeed going to move globally to a standdown Business Activity and commercial activity for all prettyntial businesses, immediately, businesses, individuals, consumers, and families are all going to need some support. Already in japan, the government has announced several packages to address that. The government has pledged to trillion yen 2 trillion yen. There are some subsidies in the works for families with additional childcare needs. And the bank of japan as you know on monday announced some major steps, including doubling their purchases of etfs, setting aside an additional 2 trillion yen for purchases of commercial paper and bonds, and finally additional amounts pledged to provide interest loans to japanese banks so they smeurn can lend to companies. As of this morning, the government is working yet on another package, and that i think demonstrates the seriousness of the situation. But also, the recognition on the part of the authorities here that much more needs to be taken, much mornings to be done, rather, and then quickly. Quickly. Ne have you seen what businesses can do to get through this uncertainty in the fact that we dont know when this period is going to end . Uncertainty of course is one of the big difficulties here in no one canon, and promise this is going to be over by any particular month Going Forward. So we are all going to have to plan for the long term here. I think our members are demonstrating their flexibility. Clearly in some industries, you need folks to show up in the office, on the job, in the factories in order to maintain production. In some cases, that kind of production is going to be critical to the rest of society continuing to function. In many cases, what we are finding is that businesses can operate very successfully through remote work if in fact they are providing services. My consult from accardi associates, last night here in japan time, we were having a global conversation with everybody online with video feeds, etc. , and that demonstrates that we can maintain services to a number of Key Industries working remotely with the technology that is available today. Many of our members are doing that. The American Chamber of commerce in japan itself is operating on just a skeleton staff in the office. Many people are operating remotely. We are not doing live in person meetings, but we are doing remote events for members to keep them informed and connected through these difficult times. Thank you so much for joining us, chris lafleur, American Chamber of commerce in japan chairman. With the fight of media access continuing, the have revoked american journalists from the wall street journal and washington post, rn them from ocating to even hong kong barring them from even relocating to hong kong. Tell us about the expulsion. It has been a steady deterioration of relations that got us here. This amounts to the largest withsion of journalists the revoking of press carts for u. S. Nationals working for the wall street journal, the new york times, the washington post. Which essentially means most journalists have to leave china. They will not be allowed to work in hong kong or macau. Which raises questions about hong kongs economy and its ability to control its media moving forward given that hong kong has served as a base for correspondents. This is part of deteriorating effects of foreign journalists in china. They voted in 2019 chinese authorities had been using these as as weapons against the Foreign Press like never before. When it comes to this particular titfortat dispute, it really heightened last month when the Trump Administration announced yours organizations will be regulated as government functionaries. China said it would expel 3 wall st Journal Staff members based in beijing after the journal had run a headline for an Opinion Column with a derogatory term used in china in the early 20th century. After that, the trump aministration announced personnel cap on Chinese Media outlets, which required them to reduce their staff to 160. That is what led to this latest move, where the Foreign Ministry and china has called reciprocal measures that china is compelled to take. We have heard strong responses as all from these American Media outlets, calling it especially a responsible at a time when the world needs a free and open credible information source amid the coronavirus pandemic. How does this all fit into of information and the origins of the virus . There has been this tense back and forth around the origins of the virus, with trump most recently on twitter using the phrase china virus for the first time, and china saying it smears beijing, accusing trump of racial discrimination. Hours before that tweet, you had mike pompeo telling a top chinese diplomat they reject chinas efforts to blame to shift the blame to the u. S. Thank you. Coming up next, tencent is one of the few winners among the coronaVirus Outbreak, picking up millions of new gamers. At earnings. Rd this is bloomberg. You are watching bloomberg daybreak asia. Aita warns bailing out the Global Industry could cost up to 200 billion u. S. Dollars a lifeline is being thrown for airlines that have not been hurt by the virus followed. Virus fallout. We have seen pressure on korean bond yields. Reactioneing a mixed to this announcement for south korea regarding Financial Aid for airlines there. Aussie carriers have also released some 750 million australian dollars from the government and waivers for fees might feel like says. They are warning citizens not to travel abroad, weighing on shares, slumping as much as 25 . Citi, more sanguine on the outlook. Surviving almost a year without flying. Softbank in look at tokyo, extending losses by nearly 10 here. Earlier dropping, the biggest drop since october. Trading now it november 2016 lows. Cash trading now at november 2016 lows novemberg now at 2016 lows. Tencent is one of the winners of the coronavirus crisis, picking up millions of new gamers since the coronaVirus Outbreak. Tencent is releasing for your results later on today. Joining us out of singapore is the strategy Deputy Director for the company. Had we expect to see the virus how do we expect to see the virus play out in these numbers . Gaming, thedia, last couple of quarters, the challenge has been to gaming and advertising sector. With more and more people spending more time on home, both these areas have seen a significant increase. In the gaming sector, there has been an increase with big titles. Gaming markets are improving. , it you look at other areas is going to be significant. , the digitals spending is a segment where we are seeing more competition. One of the challenges of course is competing against other platforms. We are increasingly seeing more and more digital agencies depending on credentials like facebook. That is a segment that might be under pressure. Competitiont the from businesses . That is a big challenge. The short video format has taken the world in a big way. Brazil, the short video format has become the most popular format. Brands are trying to figure out how they can use these formats as an advertising platform. Seeing partnering with these platforms. That will be a big pressure of in the advertising segment. Do you see the work from home rising as well . Think we will see a big swing. Moving into collaboration area, we are going to have to see how much of that new revenue or new users appear in this quarter. What are we seeing in terms of the Financial Services . Could we see a great a breakup of the fintech businesses . At some for, we will have to explore that. There have been cases where this has happened. Ndia being a prime example it makes sense, but bond therity and licensing, rentech business should be the fintech business should be settled on. In terms of internationalization, as we continue to see the Virus Outbreak in other markets now, do you see that translating into any meaningful numbers . The financial and the Business Services have been aggressive. The business has aggressively expanded weather whether it is in asia, and europe. Many businesses are moving to the ground, especially with the coronavirus. Explore morert to and more cloud applications, more and more collaborative applications, so that is one area where we see the growth. ,e are seeing other areas alibaba, becoming aggressive on the cloud platform. We see it being lucrative, but also very competitive. Thank you so much for your time. Coming up next, we are just over 30 minutes away from the start of trading in Mainland China and hong kong. A preview of the opening is next. This is bloomberg. A quick check of the business laash headlines tes reports that production on the Mainland China. The government moves to ensure shanghai factories receive at least some funds to reopen. Hsbc has appointed a ceo effective immediately. The 58yearold will take over in a difficult time for banks, amid a global recession with the coronavirus affecting customers and cutting margins. Singapores ocbc bank expects many growth this year because of the coronavirus. They told bloomberg the bank ins and a strong position in terms of capital and expectsy in the an he does not plan to expand the dividend. Sophie Capital Markets will reopen according to the philippines. Bond markets resumed this ones a, but the stock markets will only reopen on march 19th after a muchneeded relief given the losses we have seen for the pac, making it one of the worst performer so far this month. The Philippines Stock Exchange index tumbled more than 41 from the record high we saw in january of 2019. The steepest dive since 2008. Given concerns about functioning, this halt is perhaps not being left by some investors loved by some investors. Some say the trading halt has upset investors who perceive the philippines is a free market. As a free market. Sophie kamaruddin on the markets. And thep, mitsubishi surge globally. Continuets amid forecasts for china. We look ahead to the start of trade in hong kong, shanghai, and shenzhen. Stay tuned for Bloomberg Markets china open. This is bloomberg. It is 9 00 a. M. In beijing, shanghai and singapore. Markets. O Bloomberg China open i am yvonne man. I am david ingalls. Ingles. Governments vow to spend heavily to defeat the virus. The u. S. Package could top 1 trillion. A leaked data indicates sharp contraction this quarter as the Outbreak Forces factories in china to close. Candidatescratic