After months of no magic, Shanghai Disney throws open its doors today. We will assess theme parks in the coronavirus era. Mixed we are looking at a , possibly positive start for asia. Lets go over to sophie looking at the markets. Sophie asian stocks setting up for a week delivering more Corporate Updates with about 500 companies on the msci aipac to respond this week. And the impact of lockdowns certainly how look growth will be impacted is going to be in focus. We will look at korean trade for may area so this one is edging lower, may. This one is edging lower. Chicago nikkei futures edging higher. The 10year yield adding seven basis points. Tracking the move we have seen of supplyelds pressures prelooking at the offshore yuan over 7. 09. It will bring us Monthly Economic activity data from china this week. Look at the pboc plans to strengthen Monetary Policy report and Pay Attention to growth and jobs on the mainland. Lets look at commodities this morning, oil edging lower after two weeks of gains. Conversely we are seeing Hedge Fund Managers cutting to an 11 month low, Gold Holding Steady this morning. Check out the dollar edging higher. We could see the greenback facing headwinds as markets have negative rates from the fed. Fall toy we saw the one week low. The yield curve steepened again and the dollar is edging higher this morning. Lets get to the latest on the coronavirus pandemic. U. S. Vice president mike pence is selfisolating away from the white house after an aide tested positive. Yvonne man joins us with the details. We know for now the Vice President himself has tested negative. Yvonne that is what sources say, he has tested negative including on sunday. Reportedly he is staying home out of abundance of caution. Friday we learned his press secretary katie miller tested positive. She is the primary spokeswoman for the task force and she is married to stephen miller, one of trumps closest aides. This has rattled the administration now, several aides have tested positive great measures to protect the president now and Vice President. The Vice President didnt attend a meeting saturday with the president and top luke perry officials. We are learning the heads of the fda and cdc are quarantining after coming into contact with Staff Members who tested positive. Anthony fauci, the face of the Coronavirus Task force, he will also start a modified quarantine and work mostly from home the next two weeks. Haidi we are expecting to hear more details on how new york state will reopen. What are we what do we know who to work yvonne it was one of the lowest in a week and new york, he outlined more details on how the state could reopen monday. He confirmed parts of upstate would be ready to open after the may 15. Is over but there is no sign new york city or the surrounding areas are anywhere close to reopening. There were 207 deaths, the lowest number of new virus deaths since the end of march. And this outbreak could be nearing where it was at the start of what Governor Cuomo called this hellish journey. Other states are seeing signs of progress. L. A. County which is more than half of the fatalities in california, had its lowest number of deaths in two weeks. The area of 10 Million People could reopen beaches later this week. Shery the hope is that easing restrictions will help the economies. Europe is doing that. When it comes to economic outlook, it still looks bleak. Yvonne we heard from the e. U. Commission expressing a contraction of 7. 4 , the worst in its history. Hsbc saying growth, even if it bottoms out, dont expect it to get back to normal anytime soon. Spain, they are starting to ease restrictions. They are allowing gatherings up to 10 people. France is experimenting with easing restrictions. Italy and germany are taking cautious steps towards resuming Economic Life once again. Prime minister Boris Johnson of the u. K. Announced steps to lift the lockdown and loosen restrictions on movement from wednesday on word. Golf and tennis and those who cant work at home when manufacturing and construction to go to work if they can. With our markets, anchor the latest on the virus front. Coanchor with the latest on the virus front. David miller joins us to discuss the outlook for theme parks. And coming up next, what to expect from Inflation Numbers from china and india and the other key data we are looking at. Diana mousina will be with us. This is bloomberg. Karina you are watching daybreak asia. South koreas top trade official has warned the coronavirus pandemic will hammer exports harder than the financial crisis a decade ago. The trade and industry minister said conditions are tougher than in 2008 and there could be major easing across Global Supply chains. He said this could favor career could favor korea as Companies Look for secure sources. The 12 month through to next year as of revenue collapses and spending soared. The budget is taking a series of staggering blows and they say revenues are expected to fall 6 from the december forecast and 16 next year. Hong kong Police Arrested 10 people and fired repellent sprays at people attempted to rally. Demonstrators gathered in several districts in defiance of social distancing measures. Police fireday pepper balls. Two teenagers needed medical attention. Malaysias on and off Political Partners are calling for the restoration of the mandate they won two years ago. It is their first joint statement since the journal undermined the Ruling Coalition in february. They said they dont have a legal mandate and they 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. Haidi the peoples bank of china says the country faces unprecedented economic challenges from the coronavirus and it is planning to resort to more powerful policies. There could be gradual improvement. Amp strategist Diana Mousina joins us. How worrying is it that very clear changed the language from the pboc it is clear there is more concern from their side after a long time of insisting on prudence and cautious policy is the way to go . Diana thanks for having me on. Givena bit surprising that in china we have seen the least amount of fiscal stimulus in terms of supporting the economy compared to the other countries around the world, even in australia. The amount of fiscal stimulus is about 3 or so of chinese growth while other countries are close to 10 . It could be a way of preparing markets for the Committee Meeting over the next few weeks that is going to happen where we should get a new revised growth target for china. There could be a way of saying the growth target for china is going to look ambitious this year. Maybe not the 6 we were expecting earlier, but some positive number. Haidi right. In terms of the data from china has held up pretty well, but does this indicate there is concern about what else is going on in the economy . There is some estimates, once you take into account Migrant Workers could be up to 20 . [indiscernible] need more stimulus and proactive measures from the pboc to get counter things we are not seeing under the hood . Diana that could be something that is going on. If you look at the broader range of Economic Indicators from china, looks like activity is below its coronavirus levels which is not surprising. Lowerere around 20 levels. The problem with the impact of a big virus shock to the economy is productive capacity has taken a hit. It means you wont be able to run it the same capacity that you were before because of social distancing putting, not allowing you to do the same level of activity you were doing before. And that is a problem all economies are going to face. Their economy will be lower compared to precomponent precoronavirus levels. It will happen around the world. What this means is we need to see more direct fiscal stimulus from china and they need to do more monetary easing as well. The current Interest Rate cuts out of china have not done enough to increase lending. The other problem we have seen reports of, they might get a second wave of infections coming through which means you will need more support for the economy. Upry they had to lock another city preone country that has done more than enough it seems or perhaps not enough as some may think, the u. S. , whether it is fiscal stimulus or Monetary Policy, and we have seen on employment rate reached levels we have not seen since the Great Depression in the 1930s prewhat are we expecting in terms of these jobs . 1930s. What are we expecting in terms of these jobs . What will a post covid19 labor force look like . Diana that is a great question, one i am trying to get my head around every day. Losses the temporary job will just stay temporary. Once businesses are able to resume normal operations, whether they have to close because of social distancing measures, some will resume back to normal. It is prudent to expect a lot of those businesses wont be able to surprised survived the hit to cash flows that will happen for a few months time, depending on how long the virus stays in the u. S. And current measures for the rest of this year at least. And then we have to think about how fiscal policy will be able to offset the hit to cash flow. This policy can help to offset some of the weakness to business cash flows that is being felt, but i doubt it will be enough to sustain businesses from going under. The u. S. Unemployment rate will be 10 over the next few months into 2021. If you compare that to before coronavirus and it was below 4 , so we will be in a different situation unfortunately. Diana mousina, thank you for joining us today. Staying on the u. S. Unemployment rate come a looks set to worsen unemployment rate, it looks set to worsen. We spoke to blame we spoke to one official about whether states are these on appointment filings are hard to unemployment filings are hard to see. Each one is a worker and family that is on hard times. We are obviously doing all we can to help the states deliver Unemployment Benefits to them. It does appear the filings have crested. The number is declining. We dont know the extent to which the filings we reported today it was a large number, we dont know the extent to which that reflects a backlog. At the same time we are looking forward. States are beginning to reopen. We look at the prospect within weeks, some of these people will be able to go back to work. Important fromis a data perspective to make sure we know precisely the number of americans who are in need of this but also for individuals to get the Financial Assistance they need to sustain. Is there Anything Congress can do to speed along that process so people can get that money . One of the critical provisions of the cares act which the president signed was really an extraordinary additional 600 a week in unemployment europe unemployment a week. We have been working closely as we can with the states to get these payments out. The states have proved to be very old Computer Systems. They were understaffed. This has caused delays. We are trying to help them. I have been in communication with members of congress about getting that done. We will support them if they get this payment. So from a basic standpoint, Congress Might be able to provide Technological Infrastructure to help those states that are struggling to keep up . To put everyfered state in touch with the u. S. Digital service. It is a tech group, within the office of the president , working with a number of states to help them with their computers preone governor actually had to go to latvia their computers. One governor had to go to latvia to find people to help with his Computer System because it was that old. There will be occasion to consider what we should do differently going forward. The states will want to enhance their systems. In terms of making sure benefits have expanded, that is something i think washington wants to see, people return to work. I have interviewed republicans in the past several weeks who were concerned that there might be a disincentive for people to return. What are your thoughts . Unemployment is an important safety net and it was important for the president , especially now. It is important to provide next to measure of support to americans who are making a sacrifice for our national health. That said, on a claimant is never our first choice. Our unemployment is never our first choice. Our first choice is for people to work. People should go back to work. You cant get on employment if your employer is saying come back. Nor and you quit a job to get on employment the we will make sure the states, we will talk to them and our Inspector General will be looking at states efforts to bring people back to work is what we want area what we want. [indiscernible] biggesthe worlds cement and concrete producer saying it is hoping the philippines they had agreement to sell a stake in to the philippines. This has lapsed after the Philippines Competition Authority failed to issue approval within the required time, according to a statement out now. They have taken a huge hit as a result of the pandemic caused shut down to operations. This is bloomberg. Shery a city in northeastern china is now in lockdown after a surge in new Coronavirus Infections. It raises concern about pockets of the outbreak popping up elsewhere as the chinese economy is trying to regreat regain its footing. Stephen engle is straight tracking the developments. Stephen the city is on the in oneorean border region of china, the northeast region, the heavily industrial region bordering north korea. 11 new cases were reported saturday according to the local health authority. The city is investigating the source of the infections. 14 new cases were reported in china over the weekend or on saturday including those in this area. It is the largest daily increase this month. They have raised the virus threat alert level from medium to high risk. All nonessential travel is banned while villages have been closed. The proximity to north korea raises many questions. North korea says it has zero cases of the virus but many believe that to be a false claim as there is so much traffic legal and illegal across the border in the northeast part of china. North korea and state media noted that kim jongun did receive a message from the chinese president pledging corporation in combating the virus could northeast of china has not been hit as hard like wuhan, but this province does have at least reported cases, 105 totally, locally transported. In south korea i want to mention there has in a new flareup tied risingtclubs in seoul, to 54 infections possibly tied to this known 29yearold patient who went clubbing in early may. Authorities say between 6000 to 7000 people may have been exposed from nightclubs between april 29 and may six. South korea has 256 deaths. They had pretty much contained the outbreak early on, but this is a concern as they are lifting restrictions and we are getting cluster cases again. Cautionary tale for the rest of the region particularly japan because authorities are considering lifting much of the restrictions that have taken place under the nationwide state of emergency. Stephen the japanese government has been pummeled in opinion polls. More than half of the population possibly is dissatisfied with how the government has handled the crisis and perhaps they are looking at buckling to the pressure and relaxing the state of emergency that was imposed until may 31. They could lift some of those states of emergency in 34 out of 47 prefectures because the situation is getting more controlled. Tokyo, osaka and other areas need to basically have special caution is the terminology they are using. , 607 has 15,000 cases deaths. Tokyo had 22 new cases sunday. That is the trend of infection that as the trend goes lower. Haidi Stephen Engle there with the latest. Coming up next, we have got lots more to come on daybreak asia. This is bloomberg. W . W . Uhiono come onorst is yet to the job front. Then it really is going to be as the states to start to reopen and as businesses start to reopen, we need them to reopen safely. We need to monitor. We may be in an environment of gradual relaxing and then having to clamp back down again around the country as the virus continues to spread. To solve the economy, we must of the virus. Jay powell is of tibet on wednesday. We will see if there is negative chatter. Pulling of the terminal, that is being priced in. That is weighed on the dollar. Tot pushes the one week low friday. Lets go to the futures market. That has several investors scratching their heads about how much the fed has acted. Deflation is among the potential catalysts at play. The pboc is also being looked to for more policy support after the central bank said it would turn to more powerful policies and advanced Interest Rate reform. 10inese senior yelled in ayields cap to the most long time. Welets look at what else should be watching with the markets. We are joined by our asian editor. Markets are looking set for moderate gains after wall street shrugged off those dismal job numbers. Rallyks like any risk remains on pretty shaky ground. What are we expecting this week . That is right. Tolooks like we will be off a fairly positive start in asia. After that rally on friday, it was to some extent unexpected. Even the surgeon those jobless numbers. What you are seeing from thoseors this surge in jobless numbers. What youre seeing from investors is continuing of buying stocks. The focus seems to be on the reopening. At the beginning, we dont know how this will turn out. Neal saying that we could see economies reopen and we could see a surge in the virus rate. We could be back to square one with the clamping down. I think at the moment, the focus is on the reopening. That is what is giving some investors some impetus. That is where we will see markets open up in asia. Where we go from here is anyones guess. It has to do with the rates of infection. Get any sort of positive economic numbers, it is going to be a long road ahead. You also have the u. S. China trade tensions there in the background. As you have heard, we have markets rising in negative rates in the u. S. Off to a positive start but a risk rally. It is an open question whether this is how this is going up and out. It means emerging markets will continue to look at evaluation levels. Emerging markets are especially vulnerable. They had a losing week last week for stock and currencies. Risingre a lot of distress levels across emerging markets. You saw south africa last week called for african countries to be allowed a standstill. They are looking at how china is slowly reopening and the hurdles there. Emerging Market Investors are trading with caution. That have china saying india is likely to do more powerful measures to underpin their economy. Overruns fort of emerging markets. Was andrea apuc there. Asset manager looks after 1. 3 trillion dollars. He is president and ceo, david hunt. He spoke to bloomberg exclusively about when he sees markets reconciling with reality. We believe that the equity markets are substantially overvalued compared to what we think is going on in the real economy. In order to believe todays levels, you need to believe we are going to have a sharp, vshaped recovery. Going tothink that is happen. We think there will be a much longer path to recovery. That is for three reasons. First we think consumption is actually going to stay low for a lot longer. Yes, businesses will open up but that does not mean they will do business at the same level they did. I often remind people that a great deal of Consumer Spending that happens in this country are done by people 50 and over. They are likely to be much more conservative about jumping on an airplane and getting back to daily life. Secondly, we think unemployment is likely to stay worryingly high for a long time. That is because some companies are not going to make it through this at all and wont be rehiring. Others are going to do their rehiring in phases. Many will find that they dont have to hire all the employees back that they had. We actually think we will be stuck with a high on employment rate for longer than people think. The last reason is that we have not even started to see the next big problem. Our states fact that and cities and municipalities are going to have a huge hit to their tax base and the revenues. Yet, their expenses remain very high. That is the next crisis to come. I think that is going to substantially affect economic recovery. For all those reasons, i think we remain believers that this is going to be a slow road back and that the current markets are too rosy. Expand on that last point you made. Thatcularly the burden municipalities will have. Intothis translate something where we need to start anticipating a potentially higher tax base . If so, how does that affect things like Consumer Spending . I think it is a great point. There is no question that we will be looking at higher tax rates. We are talking longerterm about the deficit. My concern is actually over the next 18 months of getting a number of these groups many states cant declare bankruptcy. They need a balanced budget. That means they will have to have very substantial cuts to their services. That is the last thing we can afford at the moment. Fromnally, i believe that a practical economic point of view, i do believe we are going to need a program from the federal government to actually help out states and particularly cities as we go through the next 18 months. We have to ask you about what we have been seeing in the rates markets. Particularly today with the two year yield hitting a record low. See negative rates here, nominal rates in the u. S. I want to get your thoughts on that and what that could mean for markets. David it is a really interesting time to examine a lot of these issues. Particularly with the bigger context in mind. The are now starting to see the kinds of new issuance that will be required by the treasury to meet all of these requirements. E also see the introduction we saw a steepening over the last week of people beginning to recognize this. At the same time, as you point out, people are starting to contemplate the move tilray move to negative rates. The shortterm implication of that has been a real steepening of the yield curve. We dont think that is going to last. We think that will gradually begin to flatten overtime. Certainly for a while. We will probably live with a steeper curve. David hunt, the president and ceo. Disney prepares to reopen. About the good and not so good of reopening business during the pandemic. This is bloomberg. Asia. this is daybreak i am Karina Mitchell. Mike pence has gone into safe aid waslation after an diagnosed with coronavirus. He and the present have repeatedly tested negative for the virus, including on sunday. He is now taking extra precautions and staying at home. Europe continues to emerge from virus lockdown with governments encouraging people to go back to work. The u. K. Changing its message from stayathome to stay alert. Concerning. That is france, spain and germany are relaxing more restrictions. They are allowing people to visit beauty salons and beaches. Show signs ofs rising. Indonesia reported a record jump in new cases with fatalities approaching 1000. Malaysia is extending its virus restrictions. Largescale gatherings remain band banned. Jump inrea is facing a cases after nightclubs reopened. Australias budget deficit will blow out revenue is collapsing. A series ofas taken staggering blows. Revenues are expected to fall 6 this year from the december forecast. 16 next year. The great oil glut of 2020 may have already pete. Industry analysis and satellite images to just crude inventories have shrunk recently, having earlier hit record levels. Data indicates that supplies are being taken from storage to meet demand from the post lockdown economy. It all points to signs that the Oil Market May finally be rebalancing. Will news, 20 were hours a day global news, 24 hours a day, on quicktake and on bloomberg. Com. Shery Tom Mackenzie joins us from beijing. What exactly could this mean . On the pboc published sunday Monetary Policy implementation reports. The central bank said that it will pay more attention to. Conomic growth and jobs the shutdowns of the world way around the economy. The Monetary Policy would be more flexible. It would be more appropriate. Importantly, they report swaps and previous ways to avoid excess liquidity. That does seem to suggest that the pboc may be giving itself a little bit more wiggle room to try and support the economy here. It remains under significant pressure. Know in terms of domestic activity, we are back to almost previrus levels. The external markets remain very worrying. Shery does that worry the pboc when it comes to the Global Health of the economy . Tom that is the clear concern in the report. The Central Bank Says it has now slipped into what they described as a recession track. At least in the shortterm. They also one that they think the impact of the virus may be more damaging than many expect. They point out that the International Outlooks remain unclear and the policy among other Central Banks are limited. It does not seem that the pboc will be reaching for unconventional monetary policies at this point. Not in the shortterm. They said they would keep china at the pboc. It is one of the few Major Economies that is reporting normal Monetary Policy. They also report the fundamental economy and concerns. They say there is no need for longterm inflation or deflation. They are suggesting they have more room on that front. No concerns around price rises or price drops of any significance. They also said they would contain Financial Risks and make sure those risks are generally controlled. Hasnow the central bank been cutting reserve ratios with a targeted approach. As well with reducing rates on the daily liquidity injections. Of course, that low prime rate. That is the benchmark that has been lowered a number of times. Most economists do expect more cuts to the reserve ratios. The, a further lowering of prime rate going forward. Tom mackenzie there in beijing. Played you more to come on daybreak asia. This is bloomberg. Lets get a quick check of the latest business flash headlines. Apple will reopen some stores in the u. S. This week starting in idaho, south carolina, alabama and alaska. The focus will be on techsupport with customers urged to shop online. Apple says it will deploy instore Safety Measures including temperature checks, face coverings and social distancing. The boise idaho outlets will be the first reopen on monday with the other three states following later. Threatening to sue the california counties from blocking plans to reopen. Adding that it may relocate elsewhere in the u. S. The health order violates due process. Businesses deemed to be essential have called the virus related shutdown fascist. Global automakers are attracting at least 100 billion from banks as the coronavirus hammers car sales. Are seekingays they around 3 billion from japanese lenders. Nearly all major carmakers have tapped back for financial servicing since march. There could be a 22 slump this year. Shares in siemens climbed. Ceo spoke with bloomberg. To see the markets responding well to what we are saying, siemens has been trying to restructure the company to a resilient portfolio. Health care, Industrial Automation and the accents we have been taking on the energy side. We are right on plan with our energy business. By that time, we will have a very focused company portfolio. I think that is what we are looking at. Times are turbulent and complicated and they are very hard to deal with because there is so much uncertainty from other partners and areas but the fact of the matter is that there will be a time after corona. That is the time to look at getting prepared for the upswing and how we can benefit from that in a proper way. Thatays say to my people the night is darkest before dawn. Comforting words im sure. They can about how you prepare the Balance Sheet for this crisis. You have recently secured another 3 billion euros in credit lines. Do you have concerns around liquidity . We really dont. About our cash position. Cfo that thinks about things very well. We will pay at the dividend of 390 euro per share. We are done with that one. By september, the end of september, we will put the Siemens Energy assets to the market as a spinoff. That means this is a dividend kind of material size. That means there will be shareholder value associated with fiscal 2020. On the liquidity side, this secures a billion loan. That loan is supposed to transfer to the Siemens Energy asset so that we are all financed and in good position for a successful start to the Public Company environment by the end of september. You have kept a lot of your factories open, a lot of your plans opened. As other businesses get ready to go back to work, what advice can you give them on that social distancing and how you have prepared the business . Joe we are not going back to work, we have been working. Many people have been working from home in a very efficient way. Worst, are through the it adds more certainty about what the future will look like rethink the way we were in our company. We have seen that digitalization is not just something that we very successfully sell to our customers in industrial areas, you can apply that and we have made very big experiences good experiences about how to work from home in our company. We always think about what that would mean for our productivity and efficiency. Having said that, obviously we have basically all of our factories open except for the ones we needed to close due to regulatory matters. About 30 factories are still closed as we speak. We have been very mindful about our people. I always said that priority number one that is not negotiable is the safety and health of our people, our employees as well as the people of our partners. Have very good experience on how to manage factories, we have been building a flow in the environment tois a two meter distance environment. We have been giving out masks. We have been closing down the areas where people have been socializing. That was the ceo of siemens. Breaking out of south korea. We are getting the first 10 days of export numbers for south korea. Exports falling 46. 3 year on year in the first 10 days of this month. Imports falling 37. 2 . South korea saying that the first 10 days of chip exports are also down 17. 8 year on year. Suffice it to say, it is a huge plunge. Even in the month of april. We saw experts exports falling. These could be the worst export numbers ever for south korea. The first 10 days of may, exports fell 46. 3 . We are also getting this summary of opinions from the bank of japan late april meeting. The economy has been reacting to this increasingly severe situation due to the impact of covid19. It will remain that way for some time to come. One boj member saying that more active bond purchases are desirable. Also saying that they should have Forward Guidance when it comes to the impact of the virus in the sense that guidance has been difficult to make. Need to continue to monitor the Financial System has also been flagged. Priority should be given on providing liquidity. One member saying it is appropriate to keep adding easing to keep market stability. Same downward pressure on the real economy has further intensified due to the pandemic and that although financial and Capital Markets have been led there recently, that reflects the policy responses taken by Major Economies. There is still great risks that they will become unstable again. Coming up in the next hour of daybreak asia, they will be allowed to give us her views. More people to talk to. 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. Welcome to daybreak asia. Am haidi more haidi. Toanese stocks are close raising half of their virus red led losses. 280,000 deaths. More nations are moving moving to ease curves. China is ready to introduce more powerful stimulus to counter the buyers threat to the economy. The pboc says the country favors an unprecedented faces an unprecedented challenge. We are starting a new week across asia with Economic Data and centralbank decisions. Lets turn to sophie for what to watch. Kicking it off with the mood in tokyo. Mitsubishi is heavy. Nissan steel is among names to report. Stocks are nearly halfway to recovery. The yen is edging lower for a Third Straight session. Lets turn to south korea. We are seeing trade. The benchmark is up more than 30 from its march low. This is from the impact of the virus. We are looking at a risk of a second wave of infections. The korean won Holding Steady here. In april 29 hi. Over in sydney, after a two week advance, opening higher by a third of 1 . We are seeing the yield curve steepen between a gap of three and 10 years. This is around 70 basis points. This was a new syndicated bond sale. Lets check on the u. S. Dollar. A oneweek low as we are recapping a twoweek decline on friday. That cheddar is building up. Plus, we have supply pressures. We are seeing the 10 year yield up by one basis point early in the asian session. U. S. Features are fluctuating and up by about a third of 1 . Checking in on the offshore yua n, we are waiting to learn more details. Is losing ground after a twoweek rally. We are seeing that gain traction with hedge funds, the most bullish on wti in a year. We are just getting some lines breaking across the bloomberg. This is indonesias millionuring of 500 bonds that we have been looking at. Essentially, indonesia is to stagger that repayment plan, weighing these restructuring plans. Indonesia is drafting a 1 billion rescue plan for its flag carrier. Lets get more on the markets now. Bloomberg stocks have rallied over 23 since march. Growth expectations completely collapsing. Our next guest is taking a cautious approach. Joining us now is lucy. Ray to have you on daybreak asia. We can see this complete dislocation between what we are seeing on the map in terms of Company Earnings and the complete lack of got his for most companies that reported the season and optimism. The glass halffull approach when it comes to markets. When do we see reconciliation of these two narratives . We are seeing this disconnection between markets and the mentals. We saw in the u. S. On friday the biggest monthly job losses since the Great Depression. 14. 7 . Yment jumped to at the same time, equity markets seemed to look straight past this and closed on their high. Even acknowledging that the markets are forwardlooking, the concern now is that the markets are seeing this as a Health Crisis in a finite time. And restart play the economy again. When we look to your question marry thosewe can fundamentals, the risks to the there was plenty of opportunity. We are watching this very closely, the labor markets. Quickly int rises recessions but then takes a long time to fall. It is around three times longer for jobs to be generated. Gdp figures, we are not expecting those to return. The reserve bank, we saw them on friday. Theyll see the level of output returning to precovid levels until 2022. There are a lot of laggards on the economic front. Whereit is confusing markets are taking a cautious approach. Given that youre paying pretty pricey premiums when it comes to the level of risks we see in developed markets, where do we see opportunities at the moment . Interestinglyht interestingly, the nasdaq is positive year today. More difficult to find those valuations. Although we are cautious overall, we are happy to be selectively looking at those opportunities in australian equities. That is because we think australia is better recovered relative to other markets. It is a better place to recover from these markets. That is in our approach throughout this crisis to really try and buy good quality and toes at lower prices upgrade the quality of holdings in our portfolios. Australia isat better positioned is because heading into these crises, it has a Stronger Health care system in a better fiscal position. Also, there is that i banking sector. This allows for Better Direct stimulus of around 10 of our gdp. It is much higher than other markets and around five times what has been provided in europe. I do speak to those valuations. They are relatively bitter and australia than other markets. China and the u. S. Are around 10 . That nasdaq had an astounding recovery. When we trade up the quality curve in our portfolio, it is about looking to find opportunities where those great Quality Companies are coming in and being discounted and one of the ones we like in particular is trans urban. Seeing thatasingly as people returned to work and we start to reopen the economy, the preference will be for road travel over air travel. It is very rare that it trades below valuation. We are seeing that at the moment. We have seen Central Banks around the world very unwilling to backstop an economic depression or recession or even the markets to some degree. Onn it comes to loading up risk, why would you be willing to buy against that when investors have tried to get some yield out of these markets . Lucy that is right. Increaseding documents where Interest Rates are so low. I have been reading more and more about Interest Rates in the u. S. Turning negative. Increasingly, we are seeing investors one team to take on more risk in the equity markets as that is where we are seeing yield being generated. We would heed a warning to investors. We are also putting forecasts in case in place in case the markets are reduced. Analysts are forecasting a 40 reduction to dividends for australian equities. These are the scenarios where investors have come to rely on income generated from their portfolios to fund their Living Expenses and to look to trade up the risk curve and chase yield but that can be quite risky. Highyield can come with inherent risk. Low yieldely, in this and interestrate environment, we have been looking to consider small asset funds. Thank you very much for your time today. Seeing markets across a seeing broad sophie this stock is under pressure as much as 2. 8 . A quarterlyorted loss. That is the first in five quarters even the hit that we saw to loans. Billion ¥100 billion impact on the japanese provider. This Investment Firm urged her to a 2. 4 percent yearly rise in cash profits for the. For the time. Still ahead, as the u. S. Economy stares down the worst job numbers since the Great Depression, we take a deeper dive into why Officials Say the worst is yet to come. Coming up next, china put the city on the north korean border on lockdown. There have been newwave of Coronavirus Infections in europe in asia. This is bloomberg. You are watching daybreak asia. I am Karina Mitchell with the first word headlines. Lobo Coronavirus Infections continue to rise and now top 4 million with debts above the 280,000 deaths above the 280,000 mark. Almost 70 fine 79,000 have died in the u. S. Intopence has gone selfisolation after an aid for the virus. Mike pence and President Trump have both tested negative for the virus. Europe continues to emerge from virus lockdowns with governments encouraging people back to work. The u. K. Is changing its message from stayathome to stay alert. Critics say that is vague and confusing. Meanwhile, spain, france, germany and italy are all relaxing some restrictions beginning on monday, allowing more shops to open. They are allowing people to visit beauty spas and beaches. To introduce more stimulus. They will pay even more attention to growth and jobs. Monetary policy will remain flex flexible and prudent. It was in the Previous Report in the Fourth Quarter of last year. Local news, 24 hours a day on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than hundred 20 countries. 120 countries. Shery a city in the northeast part of china along the north korean border is now in lockdown after a surge of new Coronavirus Infections were found there. It raises questions about pockets of the outbreak popping up elsewhere just as the chinese economy is trying to regain its footing. Us with thee joins details. What do we know . Stephen this will always be the concern when you start relaxing restrictions. We are seeing pockets start to pop up not only in china but also south korea and elsewhere. Shulanshoe on city city is on lockdown. They found 11 new cases on saturday and the city is still investigating the source. China had 14 new cases including those 11 in that city. It has raised the virus alert level to high risk from medium. All nonessential transport is while compounds are being closed. Its proximity to north korea raises many questions. Hasgyang saying that it zero cases but that is whether considered to be a false claim as there is so much border traffic between the two countries in the northeast part of china. North korean state media reported that kim jongun received a message from chinese president xi jinping pledging peration in combinative combating the virus. South korea thatll the coronavirus early on in the asian epidemic in daegu. Seeing a wearing pocket up infections. New infections rising to 54 by midday yesterday. Patient, aer unknown 29yearold went clubbing. That is a nightclub district in seoul. It infected a number of people. As many as 60007000 people may have been exposed in those clubs between april 29 and may 6. Mayor has ordered the closure of all night clubs and bars. This is a cautionary tale playing out in the dilemma. Other nations are having to face how far you relax restrictions. You have to get the economy going. In particular when you talk about places like indonesia or where the verdict is out about what the right thing to do is. In places where the curve has not flattened out like indonesia, officials are already beginning to discuss reopening the economy. They are talking about five phases between now and early august. Starting from the beginning of june with the aim to have the economy fully opened by late july or early august. The trajectory of new infections will be a key factor in deciding the actual timeline. This has nots that been a full lockdown. It has been a partial lockdown in places like jakarta. That includes a ban on a gathering of more than five people. Limited public transport and the like. The concern is that while tackling the outbreak, keeping the economy going is always a concern of politicians. They are really concerned about a full grinding of grinding to a halt of the nations economy. It grew by the slowest in almost a decade. They have a tough dilemma. They have not seen a flattening of the curve. 973 deaths, 14,000 cases. I will be a conservative number. Probably a conservative number. That was Stephen Engle. We havee on the more on the relaxation of restriction rules. This is what we are seeing when it comes to the reopening from in china, a momentous day for the magic kingdom. Shanghai Disneyland Reopening after being one of the worst head businesses not just in china but globally from the pandemic related shutdown. To the reopen are already sold out. This is bloomberg. The bed is that an even bleaker situation lies ahead. Kathleen hays is here with the friday numbers. What would happen next . The biggest job losses in history in april. Are there any expectations that we might have peaked or flattened out . Kathleen flattened out or peaked . Hard to say. The numbers are going to be bad. Payroll was down 10 times more than at the end of world war ii. These are the worst numbers we the 1940s. Nce average hourly earnings, they were up 4. 7 yearoveryear. That is huge. The previous high was 0. 6 . What happened was lowwage workers lost their jobs. We have a listing of various industries and how bad the job losses were. Nearly 40 drop in leisure and hospitality jobs. Retail was also down double digits. These are lowwage workers. When you take them out of the numbers,alculate the you have a lot of higher wage workers your accounting. That is why the number works look so good. 33. 5act that we have had million americans filing for unappointed benefits since bymarch, the job surveyed the labor statistics is taken in the middle of the month. We missed the last two weeks of may, the first week of may. That will show up in the next report. The worst is yet to come on the jobs front. He is really worried about reopening. He says we might get a surge of infections and deaths. He is worried about that what about what that would do to the economy. Despite all that, we saw treasury yields higher today. What is happening in the u. S. Bond market . You would think that if you get a week jobs, the fed will be even more aggressive. People are talking about the rates already. The other side of the coin is we have the quarterly refunding coming. This is a record now. This is all driving this flood of bonds that are coming into the market. Bloomberg news is pointing out that the new consensus trade in the bond market is for actual yield curve steepening. On the short end, maybe there is talk of negative rates, futures pricing and negative rates by spring of next year, 2021. The fed has rejected this so many times, the possibility of negative rates. Lets see if he is asked about negative rates. The see if he gets rejected again. Globalleen hays, our economics and policy editor. Lets get a check of the latest business flash headlines. Taiwans semiconductor is talking about building a chipmaking plant in the u. S. The move comes amid concerns about the impact of the coronavirus. They are evaluating several options including a new operation in america. Intel is discussing a potential new to plant in the u. S. To improve domestic tax sources. Indonesia is finalizing a 1 billion rescue plan for its flag carrier as the coronavirus grounds most of its planes. The package includes a proposal to restructure garudas 500 billion deal next month. Garuda will put the proposal to investors on may 18. An agreement to sell and 86 stake in the philippine operations after the countrys regulator they lapsed after the countrys regulator failed to approve time limits. They had earlier said that the bye would create a monopoly an into san miguels operations. Miguels to san operations. The cofounder and ceo of cloud flare joins us later. Bankg up, a title central willchina Central Bank Talk about whether to abandon gdp growth targets this year. Right now gaining, all asian markets. Malaysia. Today on holiday. Lets go to sophie for a check of the markets. Asia stocks are led higher by japan. Gains of 1 for the nikkei 225 and the asx 200 this morning. The cosby extending gains. When samsung and Hyundai Motor among the 80s boost. We have u. S. Futures edging higher by. 4 to lets check in on the dollar. A oneweek low with headwinds gathering. Negative rates speculation. The deepening of the usc yield curve going into a busy week for fed speakers. The 10year yield adding seven basis points ahead of a new syndicated bond officer. The korean won on the front foot. We switch up the board to check in on some stock movers in tokyo. Monster gaining ground by more than 4 . The carmaker says it expects annual earnings to be in line with what was forecasted. Ended reports must at this among global autos rushing to secure bank funding as car sales get battered. Ac climbing 6 . Numerous shares falling after japans biggest broker posted a surprise quarterly loss. The people of the bank of china says the country faces challenges arising from coronavirus. It is pledging to use powerful policies to counter growth. Tom mackenzie joins us in beijing. Concern over the continued hits keep coming with this news of another city coming under lockdown in china. Proposing . Pboc is always a balancing act between needing to shore up the economy admits this hit from the virus while ensuring they do not reinflate Financial Risks which remain a big concern to policymakers. The top takeaway seems to me we should be expecting the pboc to step up. We are talking about Central Banks and Monetary Policy. A report released on sunday. The pboc would pay more attention to Economic Growth and jobs. Whenhas been a key focus it comes to the question of stability. They are saying they expect the Global Impact to continue to reverberate in china from the shutdown. Even though things are gradually getting back to prudent Monetary Policy has to be more flexible. Liquidity will be kept at a reasonable level. What they did not talk about was the drop in this report was the previous pledge to avoid excess liquidity flooding the system. To suggest the pboc is trying to give itself more room to maneuver in terms of the questions of liquidity. In trying to keep Financial Risks under control. Economythat the china is hurting. 6. 8 retraction for weve seen factories get that to almost speed. Almost speed. Remains the picture league when it comes to demand for chinese exports. The chinese and Global Economy is very much interconnected. Is the pboc concerned about the health of the Global Economy and how much it impacts beijing . Absolutely. This is a concern articulated in this report. What they describe a recession track in the shortterm. They are warning the impact of the virus may end up being more damaging than ins then some expect. A lot of uncertainty about the International Efforts to contain the virus. And the policy room for other Central Banks is limited. Ear the pboc is preparing for more action. It is unlikely they will reach for aunt unconventional tools. China open remains one of the few Major Economies implementing normal Monetary Policy. They are concerned about inflation. They are saying that the economic fundamentals remain in place. They is saying that theyre going to could try to contain those Financial Risks. Becomingncing act is more acute as the international slow down becomes more acute. And we look at the real possibility of a very big global recession. Seen economists say they expect additional measures from the pboc. Reserve ratios and further drops to the loan prime rate. We should look ahead to may 22, when we get the National Peoples congress. We may get more details around policy then. And more support for the economy which remains under pressure. The pboc is prepared to step up. Haidi Tom Mackenzie in beijing. Thank you. Next, hong kong seems over the worst of the virus. The china protests are making a comeback. A look at what that means for the property sector. This is bloomberg. [please stand by] this is daybreak asia. South koreas officials have warned the coronavirus pandemic will hammer exports harder than the financial crisis did a decade ago. The trading Industry Expert says bloomberg that conditions are tougher than in 2008. However, he says a realignment may favor korea as Companies Look for secure sources of components. Australias budget deficit will blow up to 7. 2 of gdp. As revenue collapses and spending soars. The budget is taking a series of staggering blows. Revenues are expected to fall 6 . And 16 next year. Hong kong Police Arrested 10 and fired repellent sprays as prodemocracy groups attempted to rally. Demonstrators gathered in several districts in defiance of social distancing. Local media said police fired pepper balls that contain irritants. Two teenagers needed medical attention. Mohammed and abraham are calling for the restoration of mandate they won two years ago. It is their first joint statement. They say the current government was not the voters choice. And does not have a mandate in they do not 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. This is bloomberg. Investors looking for a take on the great oil glut of 2020. They may have found it in the worlds biggest crude imported. Our Energy Reporter joins us from singapore. Yes. Preliminarys you are to have been dropping for a couple of weeks. Ear to inventories app have been dropping for a couple weeks. Asve seen a huge rise refineries explode during the countrys lockdown. In recent weeks as the country has reopened and people are driving more than last year because they are afraid of public transport, refineries are wrapping up. Ntories are plumbing as plummeting. As though the rebalancing has taken effect in china. The question is does the rest of the world follow . Shery we have heard about Chinese Oil Giants being backed by china, the state. Being more resilient when it comes to their cash constraints. Is that what we are seeing right now . No, i dont think so. What we are seeing is in on the ground shifted demand. We were seeing a lot of people on the roads. The great analysis arm of bloombergs tracking the number of cars on highways in china. We are seeing a huge increase. 10 million more cars a day on some days than last year. A lot of that is because the riders in buses and trains has gone down. People are driving more. Because they are trying to selfisolate away from other people. That is spurring more gasoline demand. Which has refineries pump up operating rates. The rally we were seeing in the first backtoback gain for oil since february was 25 in west texas. Is that a good signal we are seeing the bottom when it comes , or doesistoric route a lot more depend on how much we see demand picking up for Major Economies like china but across the world as we see they react you gradual reopening. You are exactly right. The signs we have seen in two weeks are positive. It is still a few weeks too early to call it a turning point. Globally. It will be important to watch those economies rebound to make sure there are no stumbles. As they start to let people out again. Numberspse and disease could cause a second shutdown, which would be horrible for oil demand. As long as there is no huge stumbles, it should be pretty good for oil. The production cuts are real. Insubstantial. In thee really going to next few weeks as we start to see inventory numbers from an around the world, they will start to make an impact. What we are in china is the first green shoots. As long as the rest of the world manages to recover as seamlessly as china, we should see that replicate elsewhere. Our bloomberg Energy Reporter. Thank you for joining us. Breaking news out of china. Reporting 17 new coronavirus cases. This would be for may 10. We do not have a breakdown of whether they were imported or domestic cases. 17 new cases, a big spike. Seen china locking down the city and the northeast of the country. Which borders north korea. 17 new cases. Cases formptomatic may 10. Plenty more to come daybreak. Haidi the ongoing protests means hong kongs Property Market has lost his most important source of investment. Mainland chinese buyers are shying away from real estate as the pandemic and protest cloud the economic outlook. Joining us is raymond lee. Great to have you with us. Buyers are one of the biggest sources of Inbound Investment when it comes to the property sector. What happens to the future of hong kong as a place to invest . Ok, yes, good morning, everybody. A lot of people ask me about covid19. I need to give you an update. Historical background first. Our price has been correct over 75 . At that time we have the the loan rate. We have a 90 load ratio and Interest Rate 8 . And we have advantages of the rapid growth in china. The growth in gdp. We have over seven years of proven time. Times for thefive residential market. Soon everybody will be looking for year today. There will be a reduction in this regard. The Hong Kong Government has been on our credit system. [indiscernible] to industry has been dropped less than 2 . The market is managing very well. Can see the massmarket very stable. House is around 15,000 units. Because of the demand you can see, even covid19 and social unrest. [indiscernible] upsetting are massmarket. Including theon residential sharp or an office. Pricel be affecting the significantly. Truck, of the rental from the time early in the year, the ranch has been dropped 70 . The rent has dropped 17 . Because of the low Interest Rate qe. Recent qe Trading Volume has dropped 60 from last years. You have talked about some of those technical factors. Shery that make the Property Market in hong kong appealing. Time weve seen protests going on for months since last year. Now you have the pandemic. Come back, the question for hong kong will be what will hong kong become as a future place of investment is more and more investors have doubts about the city . Is this something that something that the investors are concerned about . Yeah, yeah. Everybody looking in that direction. Right now because of the recent qe and our fundamental Economic Situation managing well, the number of transactions is dropping significantly. We are willing to cut the price. Except in certain cases. We have transitioned in the first quarter. [indiscernible] around 20 billion only compared to last year. Percent. Of also the low Interest Rate has dropped down to less than 2 . The cost of borrowing is very low. The bank is holding very firm. See that thee can price has not significantly. My gut feeling it will get longer from what we expected. Worldwide. Around 10 all the recent activity. Lets see how long. In these two years there will be a prime reduction for the investment markets. My expectation is around 15 drop in price. Will be happening. The volume is low at the present time. You mentioned the abundance of qe coming from Central Banks. To what extent should we brace for at a time when that is withdrawn that you see a bursting of the bubble if this support for Property Markets in hong kong may not be based on local solid fundamentals . Nothe level fundamentals is quite well. Been rime rate has around 2 . We can see a rising up to 5 . Rental, the rate drops. 70 already. Expectation for price reduction is as i mentioned because of the banks, still continued providing finance. The Central Government continues to eat. Continues qe they have lots of cash availability. It will take a longer time than expected. Qe the price would drop. E is happening in every country, we will see further what happens in six months. If the economy does not come back, then the price will have correction. Haidi can anyone replace the mainland buyers for hong kong . Very hard question to answer. Hong kong if you see our history, 60 of inflow capital is from Mainland China. Most of the big housing transactions is all from mainland chinese. Without mainland chinese i think hong kong for the investment market would be vulnerable. Apart from Mainland China, with the overseas funds, the real estate fund, but also based on the return. Our population. If we do not have any perspective for the rise in the future, it is not clear. There is no expectation of that rising in return. The overseas funds will be hesitating to invest. Answer, hong kong or rely on Mainland China purchase power. Will rely on Mainland China purchase power. Haidi thank you so much for joining us. Raymond lead with us there. Lets get you a quick check of the latest business flash headlines. Saudi aramco is said to be in talks to stagger payments for its state and petrochemical giant as the oil collapse keeps further pressure on finances. Saudi aramco is pushing up payments. And considering reducing the size of its installments. It is weighing whether it is possible to lower of the deal 59 billion price tag. Emirates is planning to secure more debt after profit fell 28 . Net income of the worlds biggest a longhaul carrier fell to 453 million. It is looking for more and its fiscal year beginning april. The company has not declared a dividend. Reliance industry has sent thursday as the date determining shareholder eligibility for 7 billion issue. The first Share Offering three decades. And reliance embarks on a Debt Reduction drive. They have pledged to cut reliance debt to zero by next march. Shery we have some great guests in the next hour. We have a tribeca investment partner. In the cofounder and ceo of set cloudflare. Matthew prince. And we will speak to mr profound as Shanghai Disneyland reopens. There is a live picture. During the covid19 pandemic, s have been close. We are waiting the shanghai reopening of disney. Inney took such a big hit the Second Quarter when profits plunged by half. The biggest to division is the parks. We await that reopening. Markets coverage continues as we look ahead to the start of trading hong kong, shanghai and shame john. This is bloomberg. [please stand by] these days staying connected is more important than ever. So were working 24 7 to maintain a reliable network, to meet your growing internet needs. Were helping customers who are experiencing Financial Difficulties stay connected. Were increasing internet speeds for low income families in our internet essentials program. And delivering selfinstall kits to your door. Nos comprometemos a mantenerte conectado. Were committed to keeping you connected. For more information on how you can stay connected, visit xfinity. Com prepare. Welcome to Bloomberg Markets china the chinese mainland and hong kong. Introduce moreto power for stimulus to counter the virus threat to the economy. The country faces an unprecedented challenge. More natio