Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20240713

Around 250,000. The u. S. Planes china. Blames china. Warren buffett bails out of u. S. Aviation. He says the coronavirus has changed the Airline Industry forever. Shery breaking news out of south korea, getting Consumer Price inflations. It is an deflation territory. This is now a contraction of 0. 6 . This is a bigger decelerations when itt was expected. Comes to the year on year figure, a little bit better, still accelerating, 0. 1 . Suffice it to say there is a lot of pressure on Consumer Prices and we have had social distancing measures continue to dampen command demand. You strip out a little bit of energyactors including factors, cpi still accelerating 0. 3 but missing expectations. This would lead to more pressure on the bank of korea to do more. Bloomberg economics expecting a 28e cut as soon as the may meeting and further measures to bolster liquidity. Look at how markets are trading, seeing Downside Pressure for kiwi stocks falling more than 1 , the lowest level in more than we have seen a lot of pressure on the aussie dollar as well. This after gaining more than 6 in april for the aussie dollar. U. S. Futures, falling more than the percent, abysmal ecodata, profit warnings. U. S. Manufacturing output shrinking at a record pace last month, haidi. The Trump Administration continuing to ramp up its rhetoric against china. The secretary of state linking the run a Virus Outbreak to a lab in wuhan. The Intelligence Community should verify so we are certain. There is evidence this came from the laboratory in wuhan. Ros krasny is in washington. Point for logical end all of the antagonism . We saw the inevitable response from beijing. Ros it doesnt seem like there is a specific endpoint right now. Pompeo has had a lot of rhetoric about this for the past several weeks. Maybe today was the harshest of it. They have not outlined any specific actions. One thing trump is exploring, he is thinking of blocking a 50 billion Retirement Fund in the u. S. To invest in chinese equities called the fifth slaving plan saving plan. That would be a significant move that would rattle the markets a little bit. There have been a number of republican lawmakers pushing for that move for quite some time precoronavirus. The covid outbreak is another excuse for them to go up to thatr what they seem may be in the next week or two. Shery we are expecting President Trump to be talking about reopening the economy tonight. What are we looking at . Ros exactly. It is a town hall meeting on fox news at the starts in arial, few minutes. Some of his chief deputies will be there including mike pence and stephen mnuchin. They are going to make a big display of the potential for the u. S. Economy to reopen and just how great that is going to be greedy have 50 states, 50 coronavirus in general the republican governors are moving more quickly because their states have been less affected. We had heard some conservative groups are going to use by governmentures as a litmus test, they will rank governors how quickly they try to get people back to work. There are a lot of questions going into the next month. Even if you open your business, your hair salon, whatever, but whether people feel comfortable coming out and going to your establishment. It will be a tricky time for the next few weeks. Definitely momentum from the Trump Administration. York area pointing the way forward for the rest of the country . We have seen a sharp drop of cases even as cuomo continues to warn against the false sense of safety. Ros exactly. When you look at u. S. Figures on cases and hospitalization, new york and new jersey have such an outsized influence on the numbers. Their numbers have been coming down. They flattened the curve. A number of other states, tennessee, north carolina, there is quite a number, as many as 20 states have coronavirus cases that are still going on in their metrics are not nearly as good. It is hard to draw conclusions except to say some states have not passed the worst. Even washington, dc is really struggling with the coronavirus. We heard from scott gottlieb, the former head of the food and Drug Administration in the Trump Administration. He suggested we could be getting into a new normal where there is 20,000 cases each day and something north of 1000 deaths. Not soas good news but good news. Really a lot of people are taking it week to week. Everyone needs to know about the pandemic, Peter Doherty will be joining us later this hour. Lets get you a quick check of first word headlines this hour. Japan will announce plans to restart the economy while extending the state of emergency to the end of the month. This allows prefectures to shut businesses and ask people to stay at home they were to end on wednesday. India is extending its lockdown want toeeks, but some her new activity. Stategapore the city wants people to work remotely even if and as it prepares to ease its lockdown on june 1. Manufacturing and other sectors should prepare for reopening but measures must ensure no flareups in the reflections. Infections. The philippines have halted all flights in and out of the country saying quarantine facilities are overwhelmed. Sydney will hold like auctions. This as the government continues to ease coronavirus restrictions through the New South Wales market has seen transaction collapse. Astralia has seen around dozen cases each day the past week. In europe infection rates continue to decline with the worst affected countries reporting fewer casualties. France will extend its Health Emergency to july 24 saying premature relaxation could trigger a second wave of cases. Italy has the fewest number since two months ago and fatalities in spain at the lowest in six weeks, germany t since theleas end of march. Shery kim jongun is back. North korea and south Korea Exchange fire in the first border clash in years. Looking at data with the anz chief. Pmis across asia in over an hour. This is bloomberg. Breaking lines out from the singaporean Property Developer that has massive exposure to the chinese market, northern retail in particular. As stable. E base china results have seen a recovery starting in march. The company sees headwinds for retail and its lodging business in the second quarter. This impact on the 2020 performance. Green shoots in china Residential Property sales are being seen and the position continues to be healthy. Earlier the capitalized retail start of the business side of the business had been cautiously optimistic. Lets discuss the economy across asia we will talk about the reality since the pandemic. We will have read decisions, gdp data from the philippines, indonesia and hong kong and inflation data. The policy response will be like untying a complex not. The chief complex knot. Great having you with us. What emergency measures are we expected to continue seeing even after the pandemic is over . Will become fixtures in the post what will become fixtures in the post pandemic world . Do you buy into the letter shaped recoveries . The are not that useful because the reality letters are not that useful because we are experimenting the opening start and some countries, they have tried to reopen, have had to repress again. They are feeling their way. What is helpful about the alphabet soup approach is what matters ultimately is the level of gdp. There will be times when we can argue with a vshaped recovery or something similar. We are not getting back to the previous level until 2022 or maybe further out. That is telling you a lot will be quite different. Shery when it goes to policy space, perhaps Central Banks getting room on the sense we have seen korea cpi decelerating. We have seen we are expecting cpi numbers from the philippines and thailand. Consumer prices starting to slow down, will Central Banks be able to do more . Richard if you look at the way asia looks like it has done a good job in terms of containing the virus and keeping markets stable. Part of that is governments and authorities have reported that have responded with a high degree of containing the virus, but also because the macro fundamentals are quite good in the region. One aspect of that is we have not had a destabilizing currency that is becoming a problematic kind of cycle. I think asia is in good shape. Part,go through the worst asia looks solid. Haidi is the rba expected to stay the course because they passed on bond buying last week . The qe schedule is looking reduced, more or less sticking to targets for now . Richard the way the rba has managed its program has been exemplary. That will become the new Gold Standard in many ways you rather than announcing a quantitative target of buying which has been a big deal, then having to revert the big deal when you announce a step down your rate of buying, they are saying we want to achieve an outcome and we will do what we think is wired. They can adjust week to week. It doesnt become this enormous announcement issue. Probably kind of remain kind of a partial attribute or two Market Dynamics at the moment. The fundamentals of suggesting on field should stay low and that is system with objectives. Thei we heard from Australian Government today saying australias population nexth will likely halve year. They say treasuries estimating the overseas migration will drop 85 . I am curious what kind of broad, longterm drags on growth and dislocation you expect to see as a result of the pandemic if we see widespread containment of migration . We will see quicker recovery and younger emerging markets like indonesia compared to the developed western economies that are already badly with the forces of aging populations. Slower it is possible migration does mean the labor market has less slack in the shortterm. Large parts of the economy rely largely on aggregate measures of activity like gdp growth. Government revenue is more sensitive. The retail sector, any business which depends on volumes for the economy is having its underlying growth rate downgraded by the lowpect inflation will stay. I dont think the announcement about the forecast for next year is a surprise. Borders are shut down. It is hard to see International Travel coming back in any meaningful way before the beginning of 2021. That is one of the big changes which we are likely to see which will have longevity in the economy, whichever one we are talking about. They will look different. What we need to emphasize is the ability of the economy on the labor market by two adjust to that so we can get people back to work and businesses earning money. Shery in the u. S. We have seen life during the very low yield onld with companies inching binging on debt. Who is the most vulnerable . Asia has a bit of a corporate debt problem. I think singapore, korea, china, they are the countries that stand out looking across country data. Corporate debt can expose you to currency mismatch. There is an issue with singapore. Part of that is the nature of its economy and maturity mismatches. In china even though a lot of. E. s, itis held by s. O seems to be something to focus on. Almost every economy you can think of has a debt problem in one of its sectors, government, corporate or household. That will elongate this recovery even more. Always way to have you. Anz chief economist. Coming up next, Warren Buffett stop betting on u. S. Airlines, getting more on berkshires decision to exit the industry. This is bloomberg. Hathaway hasire sold out of all of its u. S. Airline investments at the animal meeting annual meeting. Warren buffett says the Airline Industry has changed fundamentally because of the pandemic. He has a pretty tumultuous relationship with the Airline Industry in his investments. He thinks even post covid, it will not look the same. That is right. He is saying he cant, he doesnt have visibility of what it will look like. That is a big message coming from him after an interesting history as an airline investor he had shunned it for many years, prominently. In 2016 took stakes in the four biggest carriers because he believed the argument industry consolidation had set the companys up for a steady stream of profits for years and years. Getting out now, it seems he is saying that that hypothesis no longer holds. Shery Berkshire Hathaway still airspace,ply of the precision it was one of the biggest deals he had ever done. They are major supplier to boeing, the parts are in engines on planes flying around the world. And like boeing and airbus and the other aerospace suppliers, precision cast parts is looking at a top business outlook. The only is maintenance down because planes are not flying and that lowers demand for replacement parts, but the outlook for jetline sales is very weak because the airlines dont expect demand to recover until two or three years. We are starting to hear Airlines Talk about restarting by july. We spoke to ryanair earlier. Is that overly optimistic . So an individual Airline Might be able to restart, but is there going to be demand and will the global border restrictions be lifted . It is an open question. Internationally it is hard to say what restrictions will or will not be lifted. Even in the u. S. Different states are taking different approaches. Highlighting policy changes airlines are making required passengers to where wear face masks, it could help getting people more comfortable back on planes. Whether the passengers will materialize, that remains to be seen. Aerospace editor joining us with the latest on u. S. Airlines to look look at the headlines. Korean air lines will call a Board Meeting this month to discuss and offering worth 800 million. They will also consider asset sales to help navigate a way through the virus led collapse of air travel. The government is prepared to offer help if the carrier agrees to restructure its business in light of the virus. Lufthansa expects to finalize talks with the government soon on an aid package which would mean it would be a letter to the staff says it is having a Constructive Exchange with berlin and hopes to resume flights as soon as possible. They are locked in multistate talks with the governments of germany, austria, switzerland and belgium. Peter king of westpac says the latest Earnings Report is the most difficult in years. 36 onalf profit fell the back of bad loan provisions because of coronavirus and Money Laundering fines. They are talking about interim dividends and will review various options over the course of the year. And here is how markets are trading a we are seeing u. S. Futures falling 1. 3 after u. S. Stocks erased the weekly gains friday. We had more profit warnings and stocks ecodata, kiwi falling again, now the lowest in two weeks while sydney futures closed. 1 down. We look at the rba tuesday monetary decision are not much is expected on the rate action. We expect that we will speak with immunologist. Warning about the timeline for a virus vaccine. This is bloomberg. Shery this is daybreak asia. First word headlines. Sources are telling bloomberg that President Trump had two Intelligence Briefings before he imposed travel restrictions on china in an attempt to halt the coronavirus. On january 23, set to spread globally. A week later, the president was briefed that beijing was not sharing key data about the pandemic. The Trump Administration is stepping up its attack on china, saying there is a norm is evidence that the coronavirus ormous evidence that they covered it up. They said that this is not the first time the world has been exposed to a virus as a result of failures in chinese research. While the Intelligence Community continues to do its work, they should verify so we are certain. There is a significant amount of evidence that this came from that laboratory in wuhan. Shery hong kong says the virus may trigger the citys worst economic slump ever as they prepare to ease some health measures. Paul chan repeated his view of a contraction, which would be the deepest fall since records began in the 1960s. A Bloomberg Survey sees an economic line of about 6. 4 this year. The coronavirus is adding to the pressure on saudi arabia, already struggling with a collapse in oil prices. The index slumped more than 7 on sunday after the government said painful measures are needed to bolster the economy. Saudi aramco led the declines, falling as much as 6 as investors weighed deep spending cuts across the economy. Global leaders are wrestling with how to ease restrictions that have strangled Economic Growth across the world. All without sparking a new wave of infections. Thats get some insights into the pandemic and the next stage we are facing with Peter Doherty. He won the prize in immunology. Have you, wonderful to with us. At the start of this pandemic, the who has said speed is of the essence, not perfection, when you are dealing with these lockdowns and getting it under control. When it comes to lifting the restrictions, should there be more of an abundance of caution than what we are seeing . Comes to lifting, there is an abundance of caution. Is headingictoria for, and has, actually, very large numbers of tests going on. I have heard that our group alone, and there are many other groups testing now, because we bought time by locking things down, i think our group alone did more than 2000 tests doing more than 2000 tests a day. Known atositives from risk people who were in quarantine in hotels, returning from overseas travel or some travel. Professor, we are hearing President Trump speaking in the u. S. To media, saying that gilead is pushing fast when it comes to its coronavirus therapeutic. Theres been early data showing pretty positive indications of the efficacy of that therapeutic. He isaying that confident we will have a virus vaccine by the end of this year. We have spoken to people saying that you can sort of fast track as much as you want, but it is simply not possible to be able to sidestep clinical protocols and processes to have a vaccine that quickly. Are you confident that there will be a vaccine . Is that the magic bullet . Is really working on better levels of serology testing of Antibody Testing and therapeutics a way to go for bladder reopening of economies . Peter look, we have got an enormous amount of resources so we should be doing all those things and absolutely maximum speed, but it is not impossible we will have a decent vaccine out by the end of the year. A vaccine frome the oxford group. Think about when you are going to test and antiviral vaccine an antiviral vaccine in a human population where a virus kills people, you have to do case testing to see if the vaccine is safe in experimental animals. Once you have done that, the next thing you have to do, and that can be done very quickly, and it has already been progressed through for the british vaccine, but once you have done that, you start to put it into very small numbers of people to see if theres any safety issue, and then you escalate the numbers of people. Now basically, the only way you can test whether there is any risk when people are infected with the virus if they have been given the vaccine is to have progressively larger numbers of people out there vaccinated, and watch what happens when they get infected or if they get infected. So that process could probably go very, very quickly depending on what level of risk people are prepared to take. And i do not think it is unrealistic to think that we would have a vaccine later this year. The big issue will be of course making an honest amounts enor mous amounts of it if it looks to be successful. Shery they do need to reach the poorer developing economies. If you take all that into account, how long would it take for there to be Free Movement of travel around the world . If you get the vaccine in these developed economies but they do not reach these emerging economies, it puts everybody at risk again. Think putting i it around the world is the issue, but the people in that move around the world are not poor people in developing economies, usually, in large numbers. You make sure if the vaccine works. If it is effective, if it is protective, then you make sure that anyone who is getting on an International Flight has a vaccination, and that basically, it would even be better if they had been tested to see what level of antibodies they had. That would be a strategic and policy decision, but there is no reason once you have a vaccine, that you did not protect people, there is no reason why those people should not start to travel again, as far as i can see. Not my field of expertise, but i would ask an epidemiologist. Shery professor, what are your thoughts about even before a vaccine, getting some sort of immunity passport based on antibodies . It seems the research is yet not clear about whether antibodies actually mean immunity. Peter personally, i would be pretty confident that they do. I think theres a lot of confusion around people tested late after infection, and they were finding evidence of virus presence i what we call a pcr test, a test of the viral genome. We do know, with this virus, that we can get genetic material in the individual, but there is no evidence of inection, for instance, stool samples. Think that is what was happening. Someone interpreting this as we. I was interpreting it as persistent virus somewhere in the body. I would be surprised if the people who got antibody and circulate a reasonable amount of antibody are not protected from reinfection for at least a year or so. What we do not know, of course, is how long that protection will last, and once we start to tested the vaccine, as we escalate up in the human population, we will get a pretty quick answer if we are testing in endemic areas with a lot of virus spread. We will get a quick answer on whether it is protective or not. Professor, are we likely to see another pandemic like this in future years . Peter i think that is a good bet that we will. I mean, you cannot predict these things, as we now understand. I think the chinese and various people who are sort of operating live animal markets must be looking at this very seriously to reduce that risk, and its forr they are risky, risky influenza. The live bird markets have been a major risk for influenza and theres been processes of closing then down and all the rest of it. We have to get rid of that particular aspect of culture if we possibly can, but it is really up to the asian cultures to do that. We do not have that sort of structure in most western countries. But you can never tell where a pandemic will come from. And we do have this International Organization that was funding the manufacture of vaccine platforms to deal with this, and some of that has now gone into vaccine trials very quickly as a result of the work they have done, and i think we need a Similar Program to develop antiviral drugs against all the major groups of viruses that are potential threats. We have them for the influenza viruses. We should have had them for the coronavirus is, and we did not coronaviruse ands did not. We will have a much better idea. Trainingn enormous exercise and how to deal with the pandemic when we have modern medicine and modern control measures. You mentioned china and sort of the origins of the virus, and you continue to see the Trump Administration, the secretary of state, mike pompeo, insisting that they have evidence that this is, if not a manmade virus, at least one that originated in a lab in wuhan. Are you fairly confident that the origins of the virus came, i guess you can say, organically from within these wet markets . Peter that was the original story that we were hearing. We heard it from the epidemiologists in hong kong, and he is a great epidemiologist, but i do not know information that was based on, he was basing that on. Some story that was coming out of the Seafood Market in wuhan, which is where the wet market is. And then there have been other, apart from various scurrilous suggestions of americans bringing it in and releasing it, wethis sort of nonsense, have been hearing some speculation from china, and also from some of the european virologists, that it may have come out of nature by a bat or another species of wildlife, and it may not have come through the wet market. So that is one thing that the virologists can look at overtime by sampling more wildlife in china. Now, what trump and pompeo are saying at the moment is they believe it is a lab escape, and they say they have evidence. Now, their intelligence people have come out and said we do not think we are pretty satisfied this is not a genetically engineered virus, ok . It is not as though it has been in a lab with people messing around with it, but you could not tell the difference between a virus that came straight out of nature and a virus that was isolated in a lab and worked on for a little time with nothing particular done to it, that escaped in the lab. But if they have evidence of virus escape, and i have heard nothing of that that comes from their intelligence agency, then i hope that they will publish their information, make it available, and let us all look at it, because we would like to know that. It is not really important. It will not make the slightest difference to how we handle this pandemic. It is something for the future that the chinese gave out the virus sequence early, which is what we needed to develop tests and start developing a vaccine, so the whole thing is an exercise in distraction to do with the next United States election. Haidi for november. Peter it is pretty pointless for anyone else to buy into that. Pretty stupid. Shery thank you very much for your insights today. Peter doherty, nobel laureate, and university of melbourne professor. We are joined by the former australian ambassador to china. He says relations between canberra and beijing have fallen to their lowest point in 46 years of dup omatic ties. This is bloomberg. Of diplomatic ties. This is bloomberg. Haidi initially, the coronavirus was a health and economic story. It is increasingly a geopolitical one. Australias calls for an International Inquiry into the pandemic have frayed relations with beijing. The tension has been called the most serious since australia established omatic relations with china all the way back to 1970 through. Fromuest joins us now sydney. Diplomatic relations with china all the way back to 1973. Our guest joins us from sydney. You have this situation arising. Beit wise for canberra to pursuing this right now . Geoff i have said the timing is not wellchosen and the way we have got about it is not wellchosen. Efforts isnational to work in good company, and rather than coming out by ourselves ahead of others, and calling for this inquiry, we should have been doing a lot of diplomatic moves in the background. The world will want to have an inquiry, but there is no point if china will not be part of that either. It is how you go about it that is so important. What does the martian government get out of pursuing this at this time . You said it is a loselose situation in terms of the timing of the effects in both the way it plays domestically and abroad . Itff yes, i also described as a clearly, it is something that would have been very welcome in washington. The United States trump demonstration would have very much welcome that initiative. I dont think it was needed domestically, because the morrison government has done an extremely good job in dealing with the health issues. It is rather curious but i think probably it was more a message of support for washington than anything else. Chinaaustralia relations seem to be very tense at the moment. How much are both sides prioritizing their relationship among all of the other things on their Foreign Policy to do list . Geoff look, it is an asymmetrical relationship. People do not like to hear this but the reality is that australia depends more on china than china depends on australia. Supplier ofy big iron ore but one reason why that trade has gone so well in the last couple of years is because brazil has had major problems. He is unable to put volumes in the market that china wants, so china turns to australia. My concern really is, increasingly, beijing look at australian things, who cares about the relationship thanks , who cares thinks, who cares about the relationship . Our Economic Future is deeply tied up with china, so chinas economy. It is more than that. China is a great power in the east asian region and there is nothing we can do other than advancing our security and interests in the region unless china is supporting it or at least acquiescing. Shery heading into the november president ial election here in the u. S. , we will most likely see a more offensive President Trump when it comes to china and his constant attacks on beijing. How can australia really strategically position itself in this dynamic . Geoff the harder trump goes on china, the greater the dilemma for australia. This is a situation we have tried to avoid for years. The trumpat administration has made it very china, withts to this virus, it is adopting a much more confrontational stance towards china, and that is not saying if it is the right or wrong thing to do. This simply the fact that it is becoming more confrontational. That puts australia in a terrible position, one we have tried to avoid for a very long time. Answer, it is not and so, it inquiry ated with an this time. Ambassador, we have seen a very different approach when it comes to the kind of wolf warrior approach to diplomacy with beijing. We have seen various chinese ambassadors on twitter essentially getting into twitter arguments and responding to people. Is that, you know, something that you would have engaged in in your time . What would you make of this new approach to be more handson it also clearly more aggressive, by beijings ambassadors . Geoff first of all, they are acting on instructions from the capital, so this is coming from beijing and probably from xi jinping directly himself. And it is not the normal practice of diplomacy. I think it shows a great vulnerability by china. It does nothing to enhance soft power. In fact, it is counterproductive. Our minister wrote, china needs to think more about how democracies work. This sort of behavior is utterly counterproductive. The ambassadors on the ground know that but they are acting on instructions. China has been diplomatically quite aggressive at times but usually, it is done behind the scenes. There ambassadors are capable of making very, very forceful representations in that matter. At this is new and having slanging match that this in having a slinging match in public like this. Shery to your point, could chinese diplomacy do better . We have seen so many faux pas during this pandemic, including sending substandard equipment to europe and then touting themselves as heroes to domestic media. Geoff look, i think the public relations, soft power, dimensions of this have not been handled at all well. To be fair, china has been dealing with a massive crisis themselves, and it has dealt with it in terms of the medical aspect of it extremely well, and it is moving very quickly to economic recovery. And the world, particularly australia, appends very much on the chinese economic engine starting to turn over again. Has not beenpower handled well at all. And i think that goes to a much more fundamental thing, if you like, the way you deal with these things in china is not how they play it out globally. Shery the former australian advance that are to China Ambassador to china. Plenty more to come on daybreak asia. This is bloomberg. Shery lets get a quick check of the latest business flash headlines. Scrutiny after texts from elon musk sends stock tumbling. He said he is selling almost all his possessions and wants the u. S. Economy to reopen quickly. He sent a stream of tweets in a little over an hour, reminiscent of the messages he posted two years ago that saw him sued by regulators. Tesla later said staff furloughs will be extended by another week. Uber is to face an antitrust suit over claims drove ridesharing pioneer sidecar out of business by using money from its backers to operate at a loss for years. The ruling by a federal court in defeatncisco rare after a string of victories in similar cases paid sidecar claims uber uses its war chest to subsidize both driver pay and passenger prices to undercut rivals. Softbank international is said to have eliminated roughly 10 staff. The cuts affect two dozen employees in california and florida and are aimed at lowering costs at Portfolio Companies emerging from the crisis. In addition to the job cuts, two managing partners of softbanks 5 billion Latin American Fund have also left company. Take a look at how we are setting up in this holiday start to the trading week. U. S. Futures continuing to come under pressure. We fell more than 1. 6 right off the top of the trading session. We are coming up to taking a look at the sydney opening and that is under pressure as well after the asx had its worst session in five weeks. Asx futures showing weakness there. That market struggling to breach that 5500 level. Japan and china of course are closed today but a pretty busy start to the week with asian pmi readings as well as First Quarter hong kong gdp are on the agenda today. We also are continuing to watch oil as we see a little bit of a rebound but then losing ground in asia after that 17 rally last week. Coming up on the next hour of daybreak asia, we get a look an outlook when it comes to Chinese Consumer chinas consumer factor appeared why the fear factor is keeping people at home, not containment measures. Our guest discusses what could be done to lift spending, next. Plus, a Group Founder and the hong kong member is with us to discuss the outlook for hong kong. This is bloomberg. Shery good morning. I am shery ahn in new york alongside haidi stroudwatts in sydney. Australia and south korea have just open for trade. Welcome to daybreak asia. Investor sentiment remains weak with u. S. Futures down in trading. The aussie dollar falls with sterling and the euro. Oil under new pressure. Global virus infections top to 3. 5 million with deaths approaching 250,000. The u. S. Again blames china for the pandemic spread. New warnings about the prospect for hong kong. The government says the city is facing the most severe Economic Contraction on record. We are getting this holiday limited start to the trading week but china as well as japan closed for public holidays. We are seeing just a flat start when it comes to trading on the asx. Futures had been lower and we had a pretty bad day on friday following on the back of some poor ecodata in the u. S. As well. U. S. Futures have been under pressure so far this asian part of the session. We are also watching oil prices after that 17 rally. Signs of may be a bottom as we get opecplus starting those output curves on friday as well as watching the economic reopening in china and fuel demand there. But wti seeing some weakness and of course, shery, we are continuing to watch what will be a big week with 11 centralbank decisions and a slew of asian pmis this hour. Shery we are looking ahead to all of that as investors have to digest all of those numbers. In the meantime, a lot of safe haven demand. The japanese yen gaining ground against the u. S. Dollar as japan is away on holiday. The kospi also opening 2 lower. This will be the lowest level in more than a week. Point 3 . K down one Downside Pressure for the korean won against the u. S. Dollar. Ofhave probably sort disappointing Economic Data when it came to consumer inflation earlier today, a second month of cpi month on month for south korea in inflationary territory. When it comes to the offshore yuan, also, another session of the clients. This would be declines. This would be after the biggest drop in a month. We had news on tariffs and all of that adding to the riskon sentiment across asia, haidi. Yes, and we are watching chinese factories and companies of course going back to work, but domestic consumption is not picking up yet. 50 cities have taken to handing out vouchers to entice shoppers. Eugenia victorino joins us. We have been talking a lot about the prospect of semipermanent to permanent changes in Consumer Behavior, and that impact on the inflation outlook. Is there a sense that this kind of fear factor is going to, for some time, not just in china, but has other economies reopen, prevent people from going out and spending and consuming . Eugenia well, it is very difficult to assess whether there has really been a structural change in Human Behavior due to the trauma of the pandemic, but as far as the reaction of different countries, it would really depend on how they had been exposed to. But as far as china is concerned, it is quite clear that given the choice of whether to stay home or to go out, a lot of chinese residents continue to stay home during weekdays during weekends. It is also quite interesting that the same indicators that are telling us that chinese residents are staying home, they are also telling us that they are driving more on weekdays, so there has been some change so far, but we have only been a little, maybe almost two months, since china has started to open. But at this point, consumption is really, really quite far from normal. And what you may continue to start to see is this vicious cycle, right . Because we had that one chinese brokerage who then had to retract a report but essentially saying that when you count all of the migrant workers, unemployment in china could actually be looking at 20 or more. So when you do not have a selloff in inventories, you could see production decline. That could lead to more unemployment and less consumption. Thats exactly it. It is quite ironic that the chinese authorities did a lot of did a lot of effort to make people go back to work, but only to face the risk of losing their are if the corporates being squeezed as far as their profits are concerned because sales are just not taking off. Shery global stocks rallied more than 10 in april. Would you then say Market Pricing has diverted from fundamentals . Eugenia definitely. Just looking at the chinese valuation. Expectedlook at the earnings per share, not only is 2020 earnings per share expected to remain positive despite the dismal numbers that we are already seeing, 2021 is already expected for earnings to grow at least 15 , basically pricing in a real sharp recovery in 2021. If this continues, it is very likely that Market Pricing would need to readjust to fundamentals rare that youvery would continue to see a divergence from expectations in actual earnings. Shery does that include chinese assets as well . Because the chinese economy seems to be recovering now. It is recovering. There is no doubt about it. But as far as the level of optimism, i think it is too much. In, firstn a first out, model in the pandemic, china is clearly at the forefront as far as the recovery is concerned. But now, there are other Downside Risks that are emerging. So while i would expect the chinese assets to be relatively resilient as compared to the emerging markets universe, i still doubt that the current valuation justifies the fundamentals. Haidi where do you find value then in this situation, where there somebody question marks as to what the structural nature of economies are going to look like, what Consumer Behavior is going to look like . Where you actually find value . Or are you better off looking at safety if you are a longerterm investor . Eugenia if you are a longerterm investor, you cannot afford to be on invested un invested, specifically where you have these market moments, you just cannot afford to miss that rally. More of a are practical investor, it is a bit difficult to really take on a decision because a trend is not clear. At this point, if there is a real change in Human Behavior, the good thing about china was that consumption declined deeper than income, at least for now. That means there is still some dry powder, or you can still expect some support from pentup demand. But that will not be enough to change the story, but at least there will be some support. But that support would only be limited if unemployment numbers do not continue to deteriorate. Thatt this point, it seems as far as the chinese authorities have been doing to china, havees in limited the unemployment. But we are not that sure whether that would be enough to keep unemployment from deteriorating further. What could we possibly hear from the mpc that would make a difference to your view of the economy and how investors should feel about the markets . Eugenia well, i would definitely be looking for a some change in the Economic Outlook for 2020. Before the pandemic, the chinese theomy was probably chinese authorities were broadly expected to have 6 gdp growth target for 2020, but at this point, maybe even a 4 target is already too steep. High thepends on how targets are. Basically, the higher the targets, from actual fundamentals right now, it is a stronger signal to the market that the chinese authorities policyet out a support. If they are a bit circumspect with their target, then that is also a signal to the market that may be the chinese authorities aggressivelease as of a policy support in the near term. Great to have you. Seb head oforino, asia strategy. One stock on the move down, west bank. Lender lian dow we are off the session those in the early part of the trading session, reporting that first half cash profit, plunging 70 on pressure from bad loans, differing a decision when it comes deferring a decision towards the end of the year, but no dividend would be paid until june 2020, so we are seeing a bit of a downside reaction. Investors already starting to shore up that westpac price. We will leave it there but bloomberg subscribers can continue watching for more details. We do have the Earnings Call happening at live. You can also find the other big diary entries coming up today. Big Central Bank Week this week and any of the other events you may have missed out on earlier. An update onahead, the virus in asia as japan plans to announce measures to restart the economy later monday, plus founder joins us with his outlook for the city dealing with a double global and social unrest during the pandemic. This is bloomberg. Karina you are watching daybreak asia. I am Karina Mitchell with the first word headlines. The white house is saying that bloomberg sources are telling bloomberg that President Trump had two Intelligence Briefings before he imposed travel restrictions on china in an attempt to half the coronavirus p or he was told the infection was set to spread globally but that being infected would not be deadly for most people. A week later, the president was briefed that beijing was not sharing key data about the pandemic. The Trump Administration is stepping up its attack on china, enormousre is, evidence that they covered it up in wuhan. Pompeo stopped short of saying the infection is manmade but said that this is not the first time the world has been exposed to a virus as a result of failures in chinese research. While the Intelligence Community continues to do its work, they should continue to be that and verify so we are certain. I can tell you that there is a significant amount of evidence that this came from that laboratory in wuhan. Karina meanwhile, infection rates in europe continue to decline with the worst affected countries recording fewer casualties. France is to extend its Health Emergency to july 24, saying any premature relaxation could trigger a second wave of cases. Italy reported the fewest virus death since it lockdown started to month ago while fatalities in spain were at the lowest in six weeks. In germany, the fewest since the end of march. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell. This is bloomberg. Shery. Shery parts of europe continue to debate whether or not to ease restrictions. Other countries are extending theirs. Lets get more from our markets coanchor, rishaad salamat. Lets start in asia. What are we seeing . Rishaad lets have a look at japan. Deaths approaching 500. Horrible number but actually the lowest official tally among g7 countries. Extendingt shinzo abe the National Emergency over the outbreak. He will be doing that until the end of the month. That is coming from the national broadcast. We had an earlier signal that it would be difficult to lift the emergency on may 6 as originally had been planned because, simply, the Health Care System is overwhelmed. The Regional Governors are essentially in favor of keeping these measures. We will continue to be empowered to direct businesses to close and also to urge private citizens to stay at home. Experts warning of the risks of letting more people will travel around and that their guard down. Taking a look at other countries in this part of the world as well, which we are discussing for an extension. The Indian Government and the prime minister, narendra modi, extending the stayathome orders for another two weeks today,rom may 4, i. E. But he did ease restrictions in some areas and he is looking at ways to increase liquidity and credit to businesses as a way to restart the economy. According to a pool of ceos conducted by a national magazine, it will take at least a year for the Indian Economy to recover. Business economy severely hit by the nationwide lockdown. Moving into the philippines, essentially, all International Flights has been canceled with the exception of cargo and some others as well, and that is really down to pressure on the quarantine system currently as well. And that is really where we are at the moment, with some of these countries just looking to increase the restrictions that they do have and also at the same time, managed to keep an eye on not letting their guard down. Those whot about think, in terms of letting their guard down, you can perceive it that way, but those who believe we are over the peak and we should be prepared to end the lockdown. Rishaad lets take a look at hong kong. This is the first day government officials are returning to work. Moment, weory at the are just kind of coming out of things, a feeling of maliki on the streets. Singapore, not quite the case here. Did reduce some of the lockdown there as well, putting in place sustainable measures to prevent a flareup of the coronaVirus Outbreak as well. Employees who can work from home probably will have to continue doing so after the countrys partial lockdown ends on the first of june. We have at the moment sectors such as manufacturing which will require workers to be on site. They should start making preparations for the gradual reopening of the economy in the next coming weeks as well. More than 80 of singapores workforce is now working at home. The city state implemented a socalled circuit breaker, including the closure of schools and most workplaces. That was in early april. That is where we are with some of these countries, just seeing a bit of light at the end of the tunnel. Back to you guys. Our bloomberg coanchor, rishaad salamat, with an update. We will continue to look at westpac shares, taking a slide but coming off session lows after loan provisions take a hit, a big bite out of first half profit, plunging 70 . The dividend payout is being deferred as well. This is bloomberg. Haidi lets take a look at how westpac is currently trading in these first 20 minutes of trading. We are now down one point 5 . 1. 2 percent, i should say, after kicking off with a loss of 2. 3 . We are well and truly off those session lows. A 70 decline in firsthalf profit. Loan loss provisions soaring due to the pandemic. Emily cadman joins us. I dont know if this is a sense that benefiting from being one of the later ones to announce earnings and therefore investors are kind of almost immune to these horrible numbers, but the stock is certainly not doing as poorly as you would imagine they would with a 70 dive in profit. Emily i think this is one of these occasions where, clearly, it is a shockingly bad results. Equally, it is fully expected trading up toak this result. Two separate announcements of charges which included putting those900 million over Money Laundering Breach Allegations and just a little bit later, you know, that they were going to face a hit from covid at 1. 6 billion. Investors were prepared for this to be a bad result. And the one thing to remember also is westpac, like all of the other banks, have plunged already this year. Once it became clear how bad covid was and how much the australian economy would be shuttered, we have seen the bancshares bank shares moving down a third p or some of this is already priced in. Shery what can we expect on the dividend pay . Emily westpac has followed anz ferring the decision. Big dividenden payers paid westpac were paying out 94 australian cents a share this time last year. So right now, the situation is unclear. The bank will look at the decision throughout the year and essentially, we are going to see how it goes. It will all be down to how quickly the economy reopens, how bad the loan losses actually are. At this stage, it is just making provisions for loan losses. It has not i think in general, i do not think you can expect a lot of dividends from the australian banks this year. Maybe even next. And what are we expecting in terms of potential restructuring . Know, weah, so, you have been talking about restructuring at the australian banks for a couple of years now. Anz sold off a lot of units. Banks have been getting rid of things paid westpac has kind of stood out a little bit rid of things. Westpac has stood out a little bit. It is moving noncores misses like insurance, wealth platforms likencore businesses insurance, wealth platforms. It is hardly a great time to be selling assets into the market so i dont think we should necessarily expect any quick announcements, but it is a close statement of principle. The westpac future Going Forward is more about being a bank, a lot less about being all things to all people. Shery emily cadman, thank you, Bloomberg Finance and investing reported. For our bloomberg subscribers, you can actually continue watching westpacs interim results presentation at live. Well also find the big diary entries coming out later this week as well as some of the events you may have missed earlier. Lets now get a quick check of the latest business flash headlines. U. S. Airlines faced a potentially difficult start to the week with news the veteran investor, Warren Buffett, has dropped all his holdings. He told the Berkshire Hathaway livestream that he sold all his stakes in american carriers, saying the virus fallout has probably changed the industry forever. Delta, united, american, and southwest shares accounted for the bulk of berkshires equity sales platform. Seoul say Korean Airlines will call a Board Meeting this month to discuss a Rights Offering worth more than 800 million. The cashstrapped carrier will also consider asset sales to help navigate a way through the virus led collapse of air travel. He says the government is prepared to offer help if the korean carrier agrees to restructure its business in light of the virus. Lufthansa expects to finalize talks with the government soon on an aid package, which would make it unlikely to need Court Protection as an alternative to a bailout. A letter to staff says it is having a Constructive Exchange with berlin and hopes to resume flights as soon as possible. Lufthansa is locked in multistate talks. Here is how markets are trading at the moment. Broadside pressure with the kospi falling more than 2 , this after we have some disappointing data on the inflation front. We had cpi month on month for south korea in deflationary territory for a second month. The asx 200 also under pressure, down. 5 . We do get the rba Rate Decision later this week. We have seen the asx falling the most in a month, and now extending declines. Kiwi stocks also at the lowest in two weeks, while u. S. Futures are extending the losses that we saw on friday. Coming up next, we have a slate of asian manufacturing pmis. This is bloomberg. There are times when our need to connect really matters. To keep customers and employees in the know. To keep business moving. Comcast business is prepared for times like these. Powered by the nations largest gigspeed network. To help give you the speed, reliability, and security you need. Tools to manage your business from any device, anywhere. And a team of experts here for you 24 7. Weve always believed in the power of working together. Thats why, when every connection counts. You can count on us. Thee have we are getting latest coronavirus case numbers. China says they have three new coronavirus cases on may 3 and all cases were imported. There reporting 13 new symptomatically so on may 3. This as we continue to see global cases rising, during 3. 5 million. Check of theuick first word headlines. Japan will announce plans to restart the economy while extending the state of emergency until the end of the month. Restrictions allowed prefectures to shut businesses and ask people to stayathome. Wednesday india is extending its lockdown by two weeks, but will ease curbs in some areas. The move comes despite new infections not falling during that 40 day shut in. Stategapore, the city wants people to continue to work remotely, even as it prepares to ease its virus lockdown june 1. The government says manufacturing and other sectors should prepare for the gradual reopening of the economy. But measures must and short no flareups in a new infections. The philippines has halted all flights in and out of the country, saying quarantine facilities are overwhelmed. The coronavirus is adding to the pressure on saudi arabia, already struggling from the collapse in oil prices. Sundayex slumped 7 after the government said painful measures are needed to bolster the economy. Saudi aramco led to clients falling 6 as and westerners as investors weighed deep spending cuts across the economy. New pictures of north Korean Leader kim jongun did little to halt speculative about his disappearance. State Media Release image of his Fertilizer Factory and made no comment on the fact that has been out of sight for three weeks and that he had missed celebrations for his grandfathers birthday. The images to show him accompanied by his sister, who has been promoted to his inner circle. We have an update on the outlook for manufacturing in asia. It is graham. It is pretty grim. We have april pmi data for south korea, taiwan and indonesia. We are seeing record lows when it comes to the philippines, indonesia as well as south korea and vietnam as well as malaysia. Lets get reaction from our Global Economics and policy editor, kathleen hays. It is terrible but we are seeing across the board. And it is a lot double whammy, the loss of domestic demand as well as global demand. We were expecting pullback. People wondered, could taiwan continue to hold up . What would we see. When you look at these shifts, korea, in terms of south korea. They were at 44. 2 in march and anything below 50 signals contraction. They felt a 40. 6 in april. April, a small decline, still getting deeper. Taiwan had been at 50. 4, holding on. Benefiting from things like supply chain shifts away from china. , delta 42. 2uctors in april. Vietnam to 32. 7. To 27. 5. 45. 3 down that is a very deep drop. It is not just that the u. S. Has slowed down so much and continues to slow. We are waiting for the jobs report on friday to look terrible. Or that europe is slowed. Is that china has slowed as well. We got chinas pmis as well last week and they focus more on the larger corporations, ex parte as well docs exporting as well. Fell from just above 5250. China from just above 50, 250. 250. Has been an 50. O it has been a major source of demand for all of these countries. Intow the cpi numbers place and territory for a second month. Does this mean these countries have more room to ease for their Central Banks, to keep bringing up new measures to support the economy . We shall see. 28 bank of korea meets may at the end of the month. They have already taken steps. But we see inflation at 0. 1 euro per year yearoveryear. At has gotten as high as 1. 0 yearoveryear. Exports, ander room ever, korea, the 11th largest economy in the world and forth largest exporter. He saw their exporters down exports down 24 yearoveryear in the latest report. And there exports to china down 18 . To the aussie on countries, 39. 7. Countries. President trump speaking at an event now saying tariffs would be the ultimate punishment on china, saying if china does not by u. S. Goods, the u. S. Well and their trade deal. Of course we have seen more pressure coming from the Trump Administration on the origins of the coronavirus pandemic. So we have started to see stabilization in the chinese economy and we are getting numbers out of china this week as well. What can we expect . The rhetoric from trump, we do not know how much it is rhetoric. We do not how much is responding to the fact that the november election, where he wants to be reelected, grows ever closer. What he followthrough on Something Like this . It remained to be seen. Trade inof china and exports, this is an important indicator. Economyport x dirt is dependent on exports and on sports to the United States so this is a very big chunk. Their economy is dependent. The latest purchasing manager index raises questions about what is going on. And chinas the same way. It depends on its sales to the rest of the world, as the rest of the world slows down and as his asian neighbors slow down, who will drive demand . You have a certain amount of demand domestically, but if you arent large ex parte you have to have overseas demand if you are a large exporter, you have to have overseas demand. So much of their fate is not in their hands. Now it is in the hands of the government dealing with governments in the hands of the government dealing with the virus belatedly relative to china. If they can stabilize the economys dream back demand and get to the point where the economy can open there as well. It is the situation where you can only do so much and people are specked in the bank of china to do more in terms of stimulus. People are expecting the peoples bank of china to do more. We are seeing nevers on the export side and perhaps that will be the signal it is time to do more. Kathleen hays, our global, some policy editor. Coming up prospects for the hong kong economy. This is bloomberg. Haidi lets get you a quick check of the latest business flash headlines. Softbank eliminated 10 of its staff. The cuts affect two dozen employees in florida and california and their aimed at lowering costs at Portfolio Companies emerging from the coronavirus crosses. Partners at softbanks 5 billion let American Fund have also left the company. Korea roseina, south by double digits in april. Fullompany expects to have fall and winter collections in stores after restarting production at its italian factories. Cells are made slow in hong kong and macau, where volume on tourism. Sales were made slow. The coronavirus has adversely affected business with an impact on fullyear performance. The developer maintains its financial position it remains healthy. The company expect retail and lodging projects to read to be facing headwinds in the quarter. Capital land warns developments may experience delays. Shery the Hong Kong Financial secretary paul chan warned the city could be hit by its worst economic some on record even as authorities prepared to ease lockdown measures, amid signs coronavirus break has been contained. Legislativeg Council Member is with us. Gtv t on the library on bloomberg showing that there have been no coronavirus cases in the last 10 days, still we expect government officials to return to offices. At the same time, how distracted right balance between getting back to work and cautioned that there is not another wave of infections like what we are seeing in singapore . I think we are on the way to a recovery. The government is being very cautious, and the whole city of hong kong, i think the citizens are being cautious as well. We had 14 days of no new cases of local infection, so we are going to relax the social to i amg limit from 4 proposing 12, so you can dine out with a whole family. The government is probably thinking eight and in another 14 days, on day 17, the experts are saying, if we go through 28 days of the our new cases of local infection, we could actually completely do away with the social distancing measures. We should require certain situations that people were face masks. It is becoming increasingly clear that face masks makes a huge difference, in terms of relaxing the social distancing measures in the future. So public transport, gatherings of more than 12 people, church gatherings, things like that. I think we are on the way to situation byood. He end of may, however gdp in 1998 and in 2009 we have 2. 5. This year we are looking at anywhere from 4 to 7 . In the First Quarter i think we will be down by 10 . That has a lot to do with one of the three engines of growth for us, which is consumption, it is down by 40 for the First Quarter. Important experts where losing about 10 from last year imports and exports, we are losing 10 from last year. Our reserve has gone from 1. 1 trillion down to a hunter billion down to a hunter andon hong kong dollars, that is after expansion at the lower limit. So hong kong is waking up. That optimism is the result of 300 billion measures being taken by government. All of hong kong is waking up to the fact that we want stability and we are thinking more about the economy than ideological issues. Has a hugeg still Treasure Chest when it comes to its fiscal reserves. Should it be doing more than what it is already done . Not a hugeg is economy. Would neverople conceive of the need to raise debt in the future. So this is actually our mindset. 14 months of government low, and inis very the future we have an aging population. That is the most important thing. We have an aging population so are spending will be going up exponentially. We are not looking at the same kind of growth and land sales. There is talk now about broadening our tax base. Hong kong has no Capital Gains tax and no dividend task, none of those. So a lot of people make a lot of money without really paying taxes. Completeo undergo a tax reform, by broadening our tax base, which i support, for hong kong to be healthy. We do not want to look up to the motherland to help us, because then that would completely destroy one country to systems, right . Once we get to the other side of this and see a listing of travel restrictions and potentially the possibility of a return to consumption and tourism for hong kong. And see a lifting of travel restrictions. Is there a sense that when the social distancing restrictions are lifted, we will see an immediate return to the civil unrest and protests . Im afraid you are correct. But i think on a much smaller scale. And thethe coronavirus depletion of 300 billion of reserves and in the next five years we are projecting deficit years every year, hong kong people are awakening up to the fact that they need to balance ideological wants and economic independence from china. The last thing i want is for china to help solve our financial situation. Then it would make a mockery of people who say we could be standing more on our own so it will be striking a balance. It might lead to future consumption more. The china tourist a behalf of what they used to be. And all of the retailers in hong kong are planning for future consumption, after the coronavirus, to drop about 15 or so. To anat is attributed expected drop in Chinese Tourists that will probably never come back, because they feel that with a protest going on, that is going to be a deep divide with hong kong and they may not be completely welcome theyve and not feel completely welcome in the future. Haidi we are also concerned in these numbers about the impact on sme, because we know that small and mediumsized businesses employ almost 50 of the total workforce, excluding civil positions. This expected spike in an appointment, what does that mean for domestic Retail Sentiment . Are you concerned about your business is and what kinds of impacts have you been seeing already . Part of the 300 billion government relief package goes employers forg not letting go of their employees. In 9000 honging kong dollars per month for all employees that make 18,000 a month and over. Andink that helped a Lot Companies retaining their staff, end islarly when the near. So that helps her medicine he. So that helps tremendously. I do not see on a plummet going up tremendously. Unemploymentee going up tremendously. It is not gonna so much as i thought. Tourists will drop from the heyday but right now it is zero. So the question is, when we open the border. If we get half what we used to about 10 is probably to 50 of our 10 to 15 about messick conception and that would help a lot. Consumption c of our domestic consumptions. Lenders have been reducing rent but not enough and ive been pressuring them to reduce landlords to reduce rent. I think companies are going out of business and letting go of employs not so much because of payroll, because payroll is variable, but the rent is not. Once they vacate the premises they have to let go if everyone, including had office staff. Head office staff. So the rental, the future picture of legal battles in the court for leather to come after tenants who have not been paying rent for the past for landlords to come after tenants who have not been paying rent, it remains to be seen how that will play out. Hello . Haidi i want to get your view when it comes to elections later this year. Our would likely to see a tougher stance from carrie lam, and what kind of result you expect to see, given that, as you say, we do expect these protests and civil unrest and instability, in some parts, to return. The progovernment, probating faction probeijing faction currently occupies 43 of the electoral of the elected seats, a total of 70. I believe that number will go down in the functional constituency and in the geographical constituency and said to a lot of other people. But i think we would still maintain a majority. In other words, over 35. But a very thin margin [indiscernible] in the virus helps the new voters who start thinking about the new slogans and the opposition is now putting out information on the street saying, we are going to burn together, die together. Not care about the economy and if we do not get universal suffrage and one person one vote, i do not know if that will go down well with the voters when they come in august and september, particularly seeing our almighty reserves can be depleted by 300 billion in a matter of months. We will have to leave it there. , the you for joining us founder of the d2000 group in hong kong. More to come. This is bloomberg. Haidi lets take a look at how markets are trading at the moment. And chinamarkets close today we are seeing downside across litan markets that are trading so far hearing asia limited markets that are trading. In south korea the kospi is one of the underperformers with a downside of 2. 6 . We are seeing downside for the asx following on fridays awful session, another 1. 1 . Westpac bank being dragged down by another shocker Earnings Report. In terms of venting sentiment we had a slew of manufacturing pmis across asia about just as bad as many would have been bracing for. Record lows for a number of economies, indonesia, malaysia, and the philippines. We are also seeing that weighing on sentiment. And south korea falling to the lowest since genera, 2009. Since january, 2009. U. S. Futures extending the problem since we saw on friday. When it comes to the offshore yuan, further pressure against that u. S. Dollar, although paring back some earlier declines. This is the Third Session of declines against the u. S. Dollar as we continue to see that risk off sentiment spread across asia. The japanese yen is higher against the u. S. Dollar, the safe haven demand being felt across asset. Market the japanese closed today on greenery day, the same for china is on holiday. In the meantime we are seeing this risk off sentiment spread across asia. Yes, the fragility of sentiment playing through. We will get more analysis in the next hour. The head of Greater China investments will be with us to give and outlook as we see a difficult start after what was a stellar april. Plus, ubs Wealth Management chief china economist is with us , thoughchina open in chinas market are not trading today and his outlook. This is bloomberg. It is 9 00 a. M. In beijing, shanghai and singapore. Welcome to Bloomberg Markets china open , i am tom mackenzie. Lets get your top stories. Washington stepping up smokestacks on beijing saying the coronavirus emanated from a chinese lab. The secretary of state says there has been a coverup