Australia expresses to concern over a report china could slip duties on its exports. Lets get you started with a quick check of how markets are trading. U. S. Futures are under pressure, falling. 3 , after the first weekly gain for u. S. Stocks in three. This comes after the abysmal u. S. Economics data, the highest Unemployment Rate since the Great Depression. Next messages when it came to trade mixed messages when it came to trade. They had a constructive phone call with chinese officials on trade, but President Trump casting doubt. We are seeing oil under pressure, down. 8 . Aroundthe moment holding 24 a barrel. This as we saw the back to back weekly gains since february. Lets get to the latest on coronavirus pandemic. Mikeberg is being told pence is selfisolating away 18 he white house after after an aide tested positive for the coronavirus. We have seen several cases where several aides have tested positive. This has rattled by the administration this this has rattled the administration. Katie miller is the primary spokeswoman for the task force. The Vice President didnt attend the meeting saturday with the president along with top military officials. Mike pence said he has tested repeatedly negative for covid19. Sources say he is staying home out of abundance of caution. We have heard the heads of the quarantiningre after coming into contact with Staff Members who tested positive, and Anthony Fauci will start a modified quarantine and mostly work from home for the next two weeks. Haidi we are expecting to hear more details about how u. S. How new york will reopen. Tell us about that. Is expectedew cuomo to outline some details on how the stage could reopen later today and confirm parts of upstate new york will be ready to open after the lockdown ends may 15, but no signs yet new york city or its surrounding areas are close to reopening. This is after the state reported the lowest number of new deaths since the start of march. Other indicators are showing the outbreak may be nearing when it was at the start, what it was at the start of what Governor Cuomo calls the hellish journey. L. A. County had its lowest number of new deaths in two weeks. The area which is about 10 Million People is planning to reopen some of its beaches later on this week. Shery in europe despite several governments trying to ease lockdowns, the economic recovery is looking bleak. Yvonne hsbc saying growth will bottom out in the Second Quarter but dont expect things to get back to normal anytime soon. We have seen spain going to start allowing social gatherings atpeople, limited seating the outdoor patios. France and switzerland are experimenting, germany and italy more cautious. Primerd in the u. K. Minister Boris Johnson announcing the first careful steps to lift the lockdown. He has announced restrictions on movement, limited after leisure time for sports like golf and tennis, allowing people to drive to parks and beaches and those who cant work at home should go to work if they can. But they are tightening some rules in key areas and increasing the fines for people of breaking social distancing rules. Breaking multiple offenders could face 3200 pounds. Haidi the latest of elements on the virus front. Lets get you to first word headlines. Charlie show signs ofates writing. Indonesia has a new down jump with deaths approaching 1000. Malaysia had its. Largescale gatherings remain banned. South korea is featuring a jump in new cases after nightclubs were allowed to reopen. Australias budget deficit will blowout 7. 2 of gdp this year. Revenue collapses and spending soars. This is the budget is taking a series of staggering blows and revenues are expected to fall 6 from the december forecast and 16 next year. China is ready to introduce more powerful stimulus to counter the threat the virus poses to the economy. The pboc said it will pay even more attention to jobs and growth. They said avoiding excess liquidity floating the economy is missing. It was in the Previous Report in the Fourth Quarter of last year. Hong kong Police Arrested 10 people and fired propellant sprays as people attempted to rally in calhoun. Together in defiance of social distancing measures. Local media said police fired pepper balls. Two teenagers needed medical attention. Global news 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am karina mitchell. This is bloomberg. Shery Medley Global Advisors managing director says australia is among the markets in position we will have more. This is bloomberg. Shery u. S. Stocks punish on the green on friday and the s p 500 posted its first weekly gain in three. This despite the biggest loss of jobs in more than 70 years. A quick return to normality could lead to a change in stock market leadership. Ben emmons joins us ammons joins us now. Where can we see leadership going . It is interesting. On friday larry kudlow outlined a bit of shift in strategy by saying we would likely not get a shot down on the u. S. Economy and they are they are prepping to get it done faster. It has a big those are the essential services and what matters is the sectors those will notd come online immediately but faster reopening gives the market a level of comfort these sectors can recover with necessary stimulus behind it because there was more effort in those sectors to get people back to work. I think it is maybe the idea of leadership change. These are, hospitality in the United States as opposed to big tech. Shery when it comes to the reopening, different assets are so sitting assessing this. We have seen a five year treasury yield falling from record lows last week. Expectingminard is negative Interest Rates in the u. S. Could be around the corner, saying the message is clear. The 2year note trading at this level shows it is stuck at zero and the risk for treasury rates wilson be negative. Will soon be negative. He does have a point from a technical perspective. What happened last week in the feds funds futures market, there was a technical drive that pulled those prices into the yields in negative territory. If you think about a few years ago, we have these type of technical inversion. You have to see it, the market ultimately gets to a point where the forces are too strong that you cant avoid negative rates. There is not a policy signal. I dont think the Federal Reserve will be at this point to move to a negative policy rates. The signal you get from this is negative yield in the fed funds futures market am a we are dealing with extremely low inflation market if not mild. That is the backdrop while we see these technical effects in fed funds futures. You say are kept in asia and australia are primed to take advantage of the rebound. Is that because of the virus is further ahead than what we see in the u. S. And europe . That is one reason why that is the case. It is driven by regional factors of how they have responded to the crisis. Not only a significant amount of stimulus and response, but nothing in response, but there was a very drastic shutdown of the economy. Australia and new zealand have been better positioned. And there is the commodity aspect, we have had a rebound of Commodity Prices since march 23rd. It is not just oil. That is beneficial. You can see with the vshaped recovery. It is actually outperforming the dollar quite a bit since march 23. This is a good sign of where you could have recovery in the Global Economy prepared to say in europe where there was real struggle to get the economy back online compared also to the United States. Haidi how much of a risk is political backlash and tensions between china and the u. S. And china and australia . Australia has to kind of defendants position when it comes to the export defend its position when it comes to the exports. Is this the beginning of a second round of trade war that could derail what is looking like a fragile Global Recovery . I would agree there is a trade war simmering, not just between the u. S. And china but with other countries and china. Thethere are causes of coronavirus in the things happening towards china, what happens is you get protectionist policies. Australia coming out with this statement is notable for that part of the region given the Major Trading relationship they have with china. I would say immediately a global trade war probably not at this point. We know what that means and a lot of governments understand the fragility of their economies given the crisis, but they will be more protectionist measures when it comes to supply chains. The outcome of this crisis, we are going to see more surprises move away from china into the different regions. This is what we are seeing, a precursor to the process. There will be a big change with Global Economy. Haidi always appreciate your time. Ben e Global Advisors mons joining us. Economic trumps top adviser says there will not be another shutdown even with the resurgence. Larry kudlow expects to return Economic Growth in the second half of the year despite what he called the heartbreak of fridays job numbers. This is a tough time for everybody in america. Wherever you work or dont, it is a tough time. This jobs report today is full of heartbreak and hardship. I believe that it will prove to be temporary because i think the pandemic contraction, or the contraction in the economy caused by the pandemic will prove to be temporary and we are coming down the home stretch in terms of reopening the economy. It is a rough number. There is no question. Some of that looks to be temporary layoffs, maybe three quarters of it. That doesnt necessarily make it any better. People return to expect expect to return to jobs. We have done, President Trumps leadership, Vice President pence put together enormous rescue package. Cash, liquidity, Federal Reserve, payroll projections. It is a remarkable thing. I was adding it up, 9 trillion including the Federal Reserve and what we have done on fiscal policy and the budget. Some of this may work. We may have questions the decline. That may be part of this story inside of these difficult numbers. We will see how this works, and we will see whether we have to go back. Lets talk about president ial policies in a few moments because the second half of this and according to the cbo private forecasters, it will have significant bounceback in economic roastery that will go into 2021 which could be a fantastic economic recovery. When it comes to reopening, i want to understand if you have done Contingency Planning for a second wave . Are you doing that planning now . Yes. It is something that comes up. I will not go into details. I have talked to dr. Birx and dr. Fauci and the Terrific Team that President Trump has assembled. One of the senior people in that group, i asked that person what happens. Right now the virus numbers are flattening out. That is a good thing. That means we can reopened this economy. I asked this person if you get a jump back up in the virus numbers, and the response was, look very we wont have to shut down because first of all, we know more, we have more experience and second, we are better equipped with the right tools. Are you rethinking a relationship with the Chinese Communist party . From reports today, ambassador lighthizer, secretary mnuchin met with the vice premier of china. It was a very constructive meeting. Wasprintout, the communique very positive. China continues to tell us they have every intention of meeting the requirements and implementations of the deal that was signed last winter. Seems like 1000 years ago. They are behind on commodity purchases for that might be a function of the market and economic conditions, but he said they are pledged to continue including remedies for intellectual property theft and related measures. Those talks seem to go well and they were constructive. The chinese relationship is very complex. We know that the virus originated in china. We are investigating, the u. S. Government, National Security council, state department. We are carefully investigating what happened and what did not happen. Not transparent. A lot of people are concerned. I saw this with the president at the g7 couple of weeks ago and the other World Leaders felt the same way. They will be held accountable. They will be. When the final studies are in. White house economic adviser larry kudlow speaking to jonathan ferro. You can get a roundup of the stories you need to get going on the terminal. It is available on mobile in the bloomberg anywhere app. This is bloomberg. Shery peoples bank of china says the country faces challenges from the coronavirus pandemic and is pledging to use more powerful policies to counter the two growth. Tom mackenzie joins us. Does this mean the pboc is moving away from the targeted moderate approach . What are they saying they will do . Tom they are trying to give themselves more room to maneuver even if they are not ready to go down the route of quantitative easing. This is it was released on sunday. The central bank saying it will pay more attention to Economic Growth and jobs, the impact from the coronavirus shutdown weighing on the Global Economy. It reiterated the prudent Monetary Policy will be more flexible and appropriate and liquidity will be kept at a reasonably ample level. They have been injecting liquidity into the financial system. The report dropped the pledge to avoid excess liquidity flooding the economy, suggesting they are trying to give themselves more space to enact policies to support the economy as the pressures continue. Chinas economy has contracted 6. 8 in the first quarter. Domestic activity has resumed near prepandemic levels but it remains anemic. Given the drop in certain parts of the language, how much does that show the number and and concern from the pboc about the health of the Global Economy . Tom they stated they think the Global Economy has slipped into a recession track for the shortterm. They warned that the impact would be underestimated, the more thanld be expected or they point out the international output, controlling the outbreak remains unclear at the policy room for other Central Banks is limited. It doesnt seem at this stage the pboc will be reaching for unconventional tools at this point. Doesnt seem like it is going to be reaching against qe. China is one of the few Major Economies implement a what they describe as normal Monetary Policy. They talk about espousing policy they will put into use, expanding credit to sectors like agriculture and trade. They said in terms of economics fundamentals, they remain solid. There is no reason they said for longterm inflation or deflation. We reiterated the pledge to keep Financial Risks under control. That will be in focus as well. Economics, further cuts to reserve ratios and lowering of the loan primates. They are prime rates. They are trying to open up the playbook more. Our coanchor in beijing. Lets get you a quick check of business flash headlines. Apple will reopen some stores in the u. S. Starting in idaho, South Carolina and alaska. The focus will be on tech support with customers urged to shop online. They will employ in store Safety Measures like temperature checks and face coverings. Idaho outlet will be the first to reopen monday with the others following. Saudi aramco is looking for a controlling stake in Petrochemical Oil collapsed aramco is pushing out the second payment for its 70 holding and considering reducing the size of that initial installment. This is bloomberg. Save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to xfinity mobile. You can get it by ordering a free sim card online. Once you activate, youll only have to pay for the data you need saving you up to 400 a year. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. Its the most reliable wireless network. And it could save you hundreds. Xfinity mobile. Karina you are watching daybreak australia. Global Coronavirus Infections continue to rise and top 4 million with deaths above 280,000. The u. S. Has the most cases and realities with 1. 3 Million People infected and 79,000 having died. The virus was first reported in china. Beijing confirmed 83,000 cases with 4600 fatalities the at europe continues to emerge from lockdown with governments encouraging people back to work. The u. K. Is changing its message from stayathome to stay alert. Spain, france and germany are relaxing some restrictions starting monday allowing more shops and businesses to reopen and letting people visit beauty spots and beaches. The u. S. Market is 20 million jobs cut last month as the Unemployment Rate triples to 14 . Before this the rate was about 3. 5 , the lowest in five decades. April it is the highest level since the Great Depression and there are warnings on appointment could get worse. Is yet to come and as states start to reopen and businesses, we need them to reopen safely and to monitor and look for signs of things flaring up again. We could be in gradual relaxing and having to clamp down around the country as the virus continues to spread. We must solve the virus. Malaysias Political Partners are calling for the restoration of the mandate they won two years ago. It is the first statement since the statements in february. They say the current government was not the voters choice, doesnt have a legal mandate and dont recognize its legitimacy. 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. Australias trade minister is deeply concerned by reports china might levy tariffs on australia exports. They threatened australia with economic payback over its call for an independent inquiry into the origins of the coronavirus. Is this the payback . Tom it looks that way on the surface, but the trade minister saying the investigation into australian barley had been running for 18 months and it was going to conclude this month. China alleges australian farmers produced barley at lower than normal prices over the past several years. Barley exports are worth 1. 4 billion in it is not like iron ore, but it is not insignificant. They have been given 10 days to respond to the allegation from china. It was in the works, but you have got to remember a couple of weeks ago, australia called for the investigation into the origin of the coronavirus. The Chinese Ambassador said maybe chinese consumers will no longer want to buy australian beef and wine and Chinese Students both want to study in australia. When you look at it through that lens, maybe it is payback. It is hard to tell. Meantime,the australia is turning to ease some social restrictions. Is that expected to translate into immediate economic benefits . Intention of the prime minister. He planned to reopen the economy in three stages over the weekend, incrementally opening restaurants, cinemas, places where people can congregate. The intention is to get everything opened by july. Getting 850,000 people back into jobs. The lockdown has cost country 4 billion a week. We will get an update from the treasurer on the state of the economy this week. A deficit forecasting of 143 billion. It will be up to each state how have the easing of social restrictions. The premier is warning against complacency in this stage. We had shopping malls packed for mothers day, others opening in advance of restrictions being lifted and going into winter, it will be interesting to see if complacency does creep in and if we get a second wave in australia. Shery paul allen. Coming up next guest says coronavirus has delivered the Global Economy a massive disinflationary shock. He will tell us what that means for investors just ahead. This is bloomberg. Shery lets get straight to Sophie Kamaruddin for how markets are shaping up monday morning. Sophie a key focus will be on plans to be open around the world and attention will be on infection rates. Korea is facing a second wave of infections potentially given the market the numbers over the weekend. We are waiting on updates from corporate and we will get earnings for tencent, alibaba and other health care players. U. S. Futures are edging lower and nikkei futures in chicago are under pressure but above 20,000. Japanese stocks could stall after the rally on friday, the best day for the topix in a month. Japanese Stocks Holding steady potentially after we saw them looking to clawback half of the virus losses. We are seeing some steadiness after the kiwi dollar hit a twoweek high on reports china may impose tariffs on australian barley exports. Treasury futures are edging future through the market assesses the risk of negative rates and we will see if there is pushback from fed officials this week. Flipping the board it is steepening the yield curve, supply pressures looming large. Seeing the gap at the rightist the whitest since march. That speaks to the consensus trade we have seen that has emerged for steepening. Looking at the aussie bond market, this is as traders are preparing for a new syndicated bond to hit the market. It is lower by 12 basis points and a threeyear around haidi. Haidi governments and Central Banks throwing everything they can at the downturn, but even a ushaped recovery will have an impact on the prices of everything every day items. There is a massive disinflationary demand shock. Joining us is the private Bank Director and Portfolio Manager from credit suisse, Jasmin Argyrou. This is the concern that is gaining in the Broader Market narrative, we could be setting up with supply chains and even just availability of many types of goods. Are we looking at a situation where you have rising inflation for prices and at the same Time Companies unable and unwilling to give rise when it comes to wage growth . Jasmin i think that is exactly what we are already starting to see in australia. There will be bottlenecks, when lockdown starts to end. There will be demand for certain goods and services. You might see a price spike for those areas where there are bottlenecks, just like you saw some price spikes as people were starting toward goods before entering lockdown. Tot will not starting hoard goods before entering lockdown. Wage growth will be suppressed. The reason wage growth will be suppressed is because there will be substantial slack in the labor market, here and in the u. S. As well because unemployment, the Unemployment Rates are soaring and it is difficult to discern the genuine rate of unemployment or underemployment as well and for how long that will last. Haidi so without wage growth, which to be fair was a major struggle for Central Banks even before this hit to the system, without the possibility of that, is there any hope of a sustained recovery that has to be driven by the consumer . Jasmin exactly. I think in australia it will be really difficult for months to handle onin a good where the economy is going hasuse the fiscal stimulus been quite large and it has flows household cash through the ability of some households to tap superannuation early and the programs and measures as well as cuts to the ending rates. So i think there will be pentup demand and a spike in Consumer Spending in the months ahead to yearend but really there will also be i think on the part of households and corporates for that matter, much higher level of porsche very saving. There will be i think a little bit more concerned that we are as a society vulnerable to shocks that we had not considered before. And shocks and stresses that can hit very rapidly. And the only way to protect ourselves from that is to reduce leverage. If we want to reduce leverage, ofhave to have a period lower spending. The same is true i think for the corporate sector. Been reallyhas interesting about this financial crisis is Central Banks have been willing to move into the Corporate Bond market. Why is there little concern about potential moral hazard . Jasmin part of the reason is this crisis has not resulted from over exuberance. There might have been in certain market segments, but that is not what caused this crisis. Spending caused this crisis. So that therefore means to some extent, moral hazard is not a big issue when it comes time for to intervene in the Corporate Bond market. I think also the factor there has been a government mandated shutdown in many sectors of the economy also means that Central Banks and policymakers need to step in to fill the void that toy have needed to create prevent the Health Crisis from worsening. Bankse role of central has been primarily to ensure that lending continues to float freely during the time when Many Companies will see their cease forlow down or a temporary period. Shery so how do aussie Corporate Bonds look compared to global Corporate Bonds to you right now . Jasmin so our market has been improvement in crucial markets, but that is to some extent normal. Policy response we have seen from the Federal Reserve insofar as they have facilities through which they can purchase bonds, fallende angels, etfs, that will have spillover effects in our market, positive ones. It will also eventually have spillover effects to the emerging market securities. I think that in light of the policy response we are seeing from the fed and the ecb and the rba, what it has done is it has removed the risk there will be liquidity driven bankruptcies. Levels,ns at current that wereproducts very attractive from the point of view of longterm investors, much more compelling than they looked at the end of last year or at the beginning of this year. Haidi so guidance has been thrown out largely. You have got forecast on a macro level providing no certainty as to what the future holds. Is there a sense, as you see a past performance is not a reliable indicator, so are all things equal when you look at emerging markets and the risks that are associated, given valuations are so cheap at the moment . Jasmin exactly. There are vulnerabilities in certain emerging Market Countries per there are risks the Global Economy faces in the developed and developing worlds. We have yet to see how bankruptcies enfold in the time ahead. What we need to see is the price, is it attractive . What is the risk potential now there is a high carrie in many of the products, em bonds, different segments of those bonds as well as highyield and Investment GradeCorporate Bonds . One way to assess that is to look at history fantasy at the spread we are seeing now and the spreads we have been seeing since march, whether the injury points of the long entry points of the longterm investor has proven to be a good one. And based on history, the entry levels we have seen have been attractive. The market has already discounted recession type fault rates. From that point of view, we are betterwe have been much compensated for the risks ahead. We are starting the uncertainty around the outlook is starting to subside a little bit. Haidi it has been great to have you with us. Credit suisse Portfolio ManagerJasmin Argyrou there. Elon musk goes to court and threatens to relocate his california car plant after being denied approval to restart his operation. This is bloomberg. Clorox raised its full year sale after seeing increased demand for its cleaning and disinfectant protonix through the clerics chairman spoke exclusively to bloomberg about how they are managing the surge. We have increased our staffing. We have hired about 250 people since this pandemic started to meet the increased demand. The bigger thing for us is in the disinfecting space, where we are seeing the Unprecedented Demand up to five times some of our disinfecting products and demand for our other essential products people enjoy, whether oris in food or trashbags water filtration. Priority is getting products to people in health care facilities. We are cleaning 24 7, we are churning out 40 more volume compared to prepandemic times and we will continue to add capacity on disinfecting products. We are bringing in one external additional external manufacturer online helping us provide consumers with disinfecting product every single month and expect meaningful improvements by the summer. Products, nott like sanitize are in toilet roll which have come back to meet the increased demand, i was listening to the call last week and your cfo was talking about, you put stuff in the shops and it is sold out within 30 minutes. How do you get to a position where you can meet increased demand . We have sped up our own production line. One way is by simplifying our sku lineup which means fewer changeover at our plants and we can move them faster. We have a series of relationship ash companies who we can use crucial manufacturers to add to our capacity. We have started to invest in increased longterm capacity. We have made Strategic Investments to add another production line, to increase capacity which will not help over the next six to nine months, but it will over 12 to 18 months to be prepared for what we think is going to be a significant increase in disinfectant products as of next summer. What are the retailers telling clorox in terms of what they are expecting with demand Going Forward . We see this for obvious reason and this could last through the rest of the year. The bulk of the conversations is about meeting current demand. I want to thank all of our retailers for their patience and collaboration we are seeing to get products to the people and institutions as ugly as possible. I think it is fair to say many retailers see that the Consumer Engagement with disinfectant product is going to be higher for the foreseeable to chirp. We are beginning to have conversations with retailers on how we can plan for that, have the right supply in the future and how we can have as people go back to retail stores, whether it is physical stores or digital, how we can have the right assortment, shelving to meet future demand. Expect heightened engagement with retailers and expect the ability to supply what will be an increase in demand in significantly improved ways as of the summer. Shery that was the chairman and ceo of clorox. Tesla is claiming he will relocate the company to texas or nevada from california. He filed a lawsuit against the california county that is blocking tesla from reopening because of the pandemic. We have heard over the weekend elon musk is calling this the last straw. Falling he is not fooling around. He did sue the county and threatened to move to california or texas on his blog. If you follow what he posted, he said this is the final straw. Tesla will move its headquarters and programs to texas and nevada. He said even if we retain fremont manufacturing activities, it will depend on treated in the future. He said they are the last carmaker left in california. He also again has very much been at odds with the Alameda County folks since the pandemic shutdown began. There are many legislators and various officials in Alameda County who said they would regret if the factory were to move and they hope they can work things out. The stock is up 9 year to date. Haidi what is the other reaction . Su it is not really an option for him to move his company. It would cost money and other states have tweeted their interest, signaling they would like tesla to come to their state, georgia and utah just a few. There is a view that tesla will probably work this out. Economics or a major issue. Su keenan with the latest on the tesla drama. Coming up we take a look at some of the ecodata from the asiapacific out this week. Our next guest is with us. This is bloomberg. Shery welcome to daybreak asia. We are counting down to market opens in australia, japan and south korea. Asian markets look set to edge higher as investors digest news on trade and stimulus. Japanese stocks are close to erasing half of the virus led bosses good global infections top 4 million. Virus led losses