Transcripts For BLOOMBERG Bloomberg Markets Asia 20240713

Over the weekend. We are inching closer to that alltime high when it comes to laterchina that was set september. Of focus. Was one those are the biggest movers here today and in particular, they may be looking at that emergency in tokyo and some of the surrounding areas as well as hokkaido. Those are holding amid some of and we are tensions watching currencies as well. We are obviously watching dollar china and dollaryen. You are seeing some of these china proxies following the ram be lower. Forward markete with plenty of action. Citigroup saying we are not bullish. Someg that there should be caution on these simmering tensions. Ringgit inthe particular are ones we should be focusing on. Be closed later on. End ofsed as we mark the the ramadan festival. Asiahief north correspondent is watching development for us. Where does hong kong stand . Questionsa lot more to the power play by beijing invoke its own security laws, basically being rubberstamped, to impose that on hong kong, bypassing the local legislature which has been a which has been unable to pass article 23. The local legislation has not been able to do that. Possibilityays a that beijing could do this power play. The rest resuming and the protest possibly resuming. Hong kong has a candlelight agile. Beijing is making this move while the world is contracted by the coronavirus. Protesters like joshua wong saying we must stand up and fight and let beijing know that we will never surrender. We will describe it as the beginning of the end. We do not have enough time but we need to continue the fight. The violence hit the streets again. Estimate news puts the of the number of protesters in the hundreds and others put it in the thousands. Byre were 180 confirmed police mostly by illegal assembly. Those social distancing regulations are still in place for the coronavirus lockdown here in hong kong. At least four Police Officers were injured multiple members of the public according to police were injured and it took place in the heart of the retail center. There are more pope there are more protests planned especially on another controversial law being considered that would punish anyone in hong kong who disrespects chinas national anthem, another lightning rod issue. Do the protesters feel that they have the backing of the u. S. To continue to hit the street in this way . How will they respond . They sure hope that they have the backing of the United States. How much will donald trump want to play this hand in the growing dispute with china . That is a big question. Mike pompeo has been a little bit more outspoken saying that the u. S. Is waiting how to respond. Called that a death for the hong kong economy including the chinese officials, tariffs on hong kong goods, Technology Ranks the again it question, will this hurt hong kong more than it would hurt beijing . China does benefit from having the lower tariffs in hong kong but it would definitely not serve Hong Kong Well as the foreign minister tried to assuage the fears by the locals here in hong kong by the investors. He is saying that if everyone should have more confidence in the future than there is no need to worry, but that is the crux. The trust deficit has grown so between those wanting more democracy and the rhetoric coming out of beijing. Tom our chief northern asia correspondent covering the latest on the ground. Now we go to Karina Mitchell in new york. Said they willas never return to a planned economy and will let the market define its future. The foreign minister says that china doesnt want to change the u. S. And warned the Trump Administration to stop thinking that it can change china. China has no intention to change the u. S. Or replace the position of the u. S. While it is impossible to replace the u. S. And its own Wishful Thinking. Some Political Forces are hijacking the bilateral relations and attempting to push them to the new cold war. Taiwan is ramping up tensions by expressing support for the National Security law. She says that the promise to keep hong kongs out on me is on the verge of bankruptcy. U. S. Coronavirus cases jumped 1. 3 in the last 24 hours, blow the oneweek average as the country closes in on the milestone of 100,000 deaths. President trump has banned arrivals from brazil. Some positive news, the area around milan which was hardest hit by Police Reported no fatalities for the First Time Since the outbreak again. There is no longer a need for restrictions in any part of the country. The economy minister has endingd the process of the emergency in the capital. Is to allow the emergency to be lifted. Powered by more than 2700 journalists and analysts in more than 120 countries. I am Karina Mitchell and this is bloomberg. More on the unrest in hong kong how it fits into the broader tensions between beijing and washington. We ask how the proposed National Securities law could affect chinas global image in its handling of the coronavirus. Later the outlook for commodities amid rising geopolitical uncertainty. We get a look inside the trade flow. Welcome back, the war of words between beijing and washington continues to heat up with china accusing the u. S. Of spreading conspiracies and lies about the coronavirus pandemic. Lets get more insight from susan sure, research professor. Secretary assistant to the secretary of stake responsible under president clinton. Thank you for joining us. We heard from the foreign minister here warning us about another cold war. You were here when Henry Kissinger warned about being in the foothills of a cold war. Is that a useful framing for where the u. S. Now stands . The relationship was extremely hostile and adversarial. Is no longer just competition, it is competition with the aim of one beating the other and trying to contain the other. It is very disappointing that the pandemic did not simulate a and create an effort to save lives world wide but led to relationship. Is the Securities Law that beijing seems determined to push through just another further erosion of that citys autonomy or is it a potential Tipping Point in the relationship between beijing and other countries . It is not clear to me how the Trump Administration intends to ofpond to this bombshell law overout a security the heads of in hong kong and effectively disregarding the law. There are so money different , and the the agenda Trump Administration has been fronts, onk on all every continent of every domain. Clear to me how much President Trump or others in the Trump Administration really care about hong kong. Certainly in hong kong the reaction has been very strong and i definitely expect some new distillation from the congress to hit back. Unfortunately there is a need to kongs whether or not hong still has the autonomy needed for the United States to treat it as a separate economy. Many of its regulations. No, because it does seem obvious that the hong kong thenmy has been abridged, the punishment is going to fall on the people of hong kong and not beijing. Some members of congress will find another approach that would give back more against the decisionmakers in beijing than the people of hong kong. Yvonne how do you penalize china without hurting hong kong in the process. Wondering, a lot of developed countries do have National Security bills. National had a security bill since 2009 and has not had a lot of problems there. What legends can hong kong take from that . Do you think that the model can be replicated . Macau is very different from hong kong. Chinese government has been calling the shots in macau for a long time, even though it formally has autonomy. So its a different situation. Yvonne hong kong does have a lot more freedoms here than what you are seeing in the mainland my freedom of speech, independent judiciary, rule of law, how far do you think that china plans to go in taking away these freedoms . Hong kong still thrives if some of these freedoms are taken away . That is a position many officials will have to decide, will they stay in hong kong or move to singapore. Will have to see how the security legislation turns out that the prcppear security agencies will establish themselves in hong kong. A rash of from democrats in hong kong recently and the criticism of these folks , that they have been accused of. Ubversion on hong kong i expect it will be very difficult for the press, for Civil Society to function in the way that it has functioned in hong kong for all this time. I think you will see hong kong become increasingly just like another city in the prc. I do think that this is a major shift, a major inflection point. If there was any glue holding the u. S. And china together it is the phase one trade deal. Do you expect it to hold until those elections in november . I think both will try to carry it out. It will be difficult for china to make the purchases given the state of their autonomy, but trump is president very focused on winning the and it dependson , hes he handled covid going to try to maintain a facade of this trade deal. Yvonne i just went to mark some lines in japan. The economy minister speaking to reporters in tokyo. Hasng that the japan panel improved the declaration to lift emergencies. Still a ways from more details on that but they are going to be weking about tokyo after have seen cases there dwindle like the rest of the country has seen. Planning to lift that state of emergency declaration. Earlier than expected about less than a week from when that was set to expire. Who have more details on that front. That is what local reports were reporting earlier. Are wek to japan not . Be taking a look at markets. Weve seen japanese markets react to news of the prospect that those emergencies will be lifted. Some airlines looking more favorable in the tokyo session. Well have plenty more ahead. This is bloomberg. Yvonne more signs of reopening. We are hearing some lines pressing in korea that all flight passengers are required to wear masks starting may 27. We have seen some flights resume, Business Travel between south korea and china, also when it comes to japan. A panel that experts have approved. To declineontinue and deaths well below 1000. Visibly so in light of the economy ministers comments. The case count has stayed below 70. Clear the way for the governor on tuesday it will start with museums and libraries. Bars will be allowed to stay open. On at 6 00ut p. M. Tokyo time if this will be confirmed and if the decree will be to for the capital, hokkaido. The economy minister saying the state of emergency was no longer needed for any region. We are also learning from companies of their plans to reopen 50 more stores in japan this weekend for the business is struggling the government has reported the finalized a leaf package of more than relief 28age of more than million. This is to coordinate efforts to support the economy which has entered recession. There are political scandals. A record low. Tom we are in investors are welcoming the new set of japan. Where else in asia are we seeing lockdown easing . Starting in Southeast Asia the Philippine Government announced more businesses can get back to normal including pharmaceuticals. In singapore, we are expecting a fourth extra budget to be announced on tuesday. Over in india, after a two month shut down, air travel will be around again. Mumbai andcome up others will start new operations today while others will only resume flights from thursday as several states have more time to prepare for airport. So dude ands will be back in the classroom and south korea on tuesday as part of a schedule to get classes up and running by june 8. Authorities remain on high alert. Koreans are encouraged to rein in nightlife outings again. We may learn more of president moons plans for a korean style new deal. Next hosting a meeting month to discuss a supplementary budget. Tom thank you very much. Plenty more ahead on the show stop this is bloomberg. Karina mitchell with first word headlines. Hong kong Police Arrested 180 people after using teargas and protestersns against. The biggest rally in the city since the coronavirus outbreak came after beijing announced National Security by passing its elected legislative council. The Hong Kong Government said the protest was beneath the new security measure. He will likely be able to certify that hong kong maintains a high degree of autonomy. If that happens, there will be sanctions we will impose on china. Samsung has denied reports saying huawei has asked for a guaranteed supply of memory chips amid mounting pressure from the u. S. To isolate the chinese company. While we requested a stable delivery huawei requested a stable delivery. It is amongst the biggest customers for korean ships spending more than 8 million every year. Jongunrean leader kim is testing relations with the rest. West. Leaders theyary should boost north koreas arsenal. State media did not say when the media when the meeting happened. Netanyahu has become the first israeli Prime Minister to face a criminal trial while in office, denying a series of charges related to bond and bribery fraud and barbary bribery. He appeared in Jerusalem District court to deny any wrongdoing. Says the whole case is a left wing scam. 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. Yvonne thank you. Commodities could wrap up their first month the bond set of gains. Gold, copper all trading higher in may. Lets discuss that with tom janes. Tom james. Thank you for joining us. I know you dont focus too much on the base metals, but it seems like we are seeing commodities markets dealing with a little bit more on the optimism of economies reopening. But then you have the u. S. China trade tensions that seem to be surfacing again. To easeple still need even though they may drive less, while demand is starting to pick up. It is definitely looking like a ushaped recovery. We have seen a lot of restrictions on shipping and the movement of goods and people and that takes time to recover. There is a bit of a backlog in the markets. Yvonne not just u. S. And china but also china and australia. We have seen beijing slept tariffs on australian barley slap tariffs on australian barley. Om that was surprising news with these types of trade wars going on and the blame game about covid19, that is causing some disruption. We have seen Climate Change impacting a lot of the rice and grains markets, Strange Weather going on, which not enough rains or heavy rains, these types of tariffs are boosting prices. We have not seen these types of price rises. That will impact people who are already having a tough time with general food prices pushing up. Tom that has implications. In terms of what we are seeing, soybean purchases was something of a barometer as to how well the relationship or how badly the relationship was going. What was interesting was that in february and march, we saw Commodity Prices coming down. Everyone felt this was another 2008 kind of crash but it was very different. This was the first time we have seen both supply disruption in many markets as well as demand disruptions simultaneously. What was interesting, oil, cashew nuts collapsed quickly but a lot of the Beans Markets held up pretty well. You saw a five or 6 slip during the initial impact of covid19. Prices have been recovering pretty well. I am still quite they are still quite stable at the moment, i have to say. Tom interesting. It is a story we have been discussing around the surplus of oil and the lack of storage in the u. S. When it comes to soft commodities, what is the dynamic you are seeing . Moment, a lot of prices are very high. Shippingeen disruptions, which supply disruptions so containers have been in the wrong place as well. Many months of lag to get logistics in the right place. That means the stock markets have been held higher quite well more the demand for immediate supply as opposed to storing anything at the moment because of the degradation of the markets. Oil ery much the yvonne right. Mostly oil. You make hundreds of transactions when it comes to commodities. What do you think they are doing right at this point . Our fund is set up to specifically target and support smu firms and small transactions, which are typically the agricultural markets and small energy deals. The biggest threat we have at the moment has been because of the crisis, banks who are the traditional lenders of toanciers for this trade keep economies moving are pulling out. There is a lot of nervousness in the credit markets and banks and traditional lenders are pulling out of this space. We are swamped at the moment in terms of demand from these firms to help support the smaller deals, below 15 million per trade. Agrideals. Bulk of yvonne last question. Out of all the commodities that you cover, what stands out to you as being in outperform or . Er . T will be outperform be the has to agrimarkets. Dynamicsad the supply issues andvid19 continued restrictions of moving people and shipping around, which has slowed everything down. Eather impact says well. There is a bit of a strain on some of the key food crops. Tom thank you very much for your insight. Tom janes. Tom james. That is just ahead. This is bloomberg. Tom welcome back. Pandemic, rising trade tensions, extra emphasis on Asia Economic news this week. Malcolm scott joins us on the line. We have been talking about some of these economies. Japan, for example, starting to relax some of its restrictions. China, we have the manufacturing pmi out. What is it that you are looking at . Give us a sense of where the economy in this region is heading. Outcome the key issue malcolm the key issue, can se signs of some stability can they maintain and can they continue to strengthen if the rest of the world remains in lockdown . If the rest of the world demand is a big question mark. We have seen chinas Manufacturing Sector come back to life but the demand is not there. Even in that economy, which was first in and first out, we are seeing this demand lack. Demand lag. Data that will be key to see those strengths at the end of the week. Report. S that pmi can it hold in may . We are expecting the bank of korea to decide on policy this week as well and we have seen differences in regional Central Banks. A surprise cut from the r. B. I. On friday. But you have the bank of indonesia hitting the pause button when it comes to easing. Our policymakers in asia done with easing . Stage, it is not a comprehensive survey yet, more expect more economists are expecting a cut more than a hold. Benchmark Interest Rates could go down to. 5 . There is even one economist saying. 25 for korea. The Central Banks in this part of the world have done a route done a lot already. We are coming to a stage where there is limited room to do more. Announcingfriday more details on that Lending Program to small businesses. It seems we have gone through the benchmark and the emergency work to stop it from becoming a financial crisis. Now the real focus is making sure they can keep businesses afloat and keep workers in jobs. That means Lending Programs and lots of liquidity operations. There is not a lot of room for continued conventional easing. Singapore,ms of stimulus measures potentially on tuesday, what are you expecting on that front . How much more can i do . Malcolm they have such a robust position in terms of relative to other economies. They probably can do a lot more. The data suggests they are going to need to. We will get a final number and that should confirm that the economy is suffering. At such a small open economy, reliance on the rest of the manufacturing, supply chains or international tourism, Business Travel, singapore relies on the global economy. It will struggle. There is more work to do there to ensure people stay in jobs and the economy does not crater. Tom a busy week for you, thank you very much. Stocksup, the chinese that brought the attention to mark mobius. This is bloomberg. Yvonne Mobius Capital Partners despite the escalation in trade tension. He tells us which companies he is looking at. Mark there is no question that tensions are rising and it has been going on for quite some time. Beginning with this trade war and a number of other acts, we cannot expect seeing any letup. Nevertheless, there are lots of stocks in china that can be purchased that are very profitable and are growing despite the problems we have seen. We have to take it stock by stock rather than a general picture of the chinese market. Help me understand how you screen stock by stock and how that plays into what the government will do in terms of stimulus. That you look at stocks will not be impacted by a trade war. Look at stocks that have a global footprint. Many of these chinese stocks, alibaba is the obvious one, a global front end a global footprint. Very,t stocks that have very strong balance sheets. At this stage, we have to have something able to acquire other companies and gain market by doing so. Things we are the looking for in chinese stocks. Can you give me some names . All you hear about Chinese Companies, how much debt they have. Mark normally, that is true. Names like alibaba, the obvious one. There are a number of one similar to that. I cannot give you the names because we might be buying them. Names like alibaba, tencent, these are companies that would be looked at. Fair enough. If these Companies Get delisted from the nasdaq because of the trade tensions, does that change how you think about them at all . Mark not really. Yorkompanies listed in new that will not be any problems to these companies because they are already doing International Accounting and it would be easy for them to come up with the right accounting practices. What you have got to see is any problems in the face of banks sanctions. That is an area that could be where you have to be cautious. There are global company. Are you worried we will see some sort of supply chain shift accelerate because of the virus or does it not matter as much if you are looking for the right kind of companies that would be more immune to Something Like that . Mark this is already taking place. It is not only the American Companies that have supply chain problems. The Chinese Companies as well. They have to look at afield out of their own area to find where they can get their supplies that will not be sanctioned by the u. S. The interesting thing that has happened, many chinese manufacturers are moving outside of china to manufacture in other countries so they can get under the u. S. Trade barriers. That is another thing you have to look for. Companies that are strong in china that are moving globally and becoming more of a Global Supply chain company. Tom that was mark mobius. Tencent alibaba and despite the tensions between beijing and washington. Biologics reversed gains after a report that its experimental vaccine was safe and created an immune response. The vaccine stimulated production of growth antibodies that can stop infection along with immune t cells. Further research is needed to show effectiveness against the virus. Samsung has denied a report saying while weight has asked for guaranteed supply of memory chips and is mounting pressure from the u. S. To isolate the u. S. Isolate the company. While weight is among huawei is among the biggest consumers for korean ships. Chips. Yvonne sticking with health how the medical community is dealing with the coronavirus and the challenges they face. The pandemic itself has been such a focus of the medical community. We have to remember that there are other things going on, other Health Care Issues that need to be taken care of, some reports this week about drops in pediatric vaccination rates are concerned. Things that not getting done now have implications later on in the year. Brazil . Erious is andrew the Southern Hemisphere is getting into its late fallearly winter season so there has been concerns about whether or not the covid19 virus would do better in cooler conditions. Brazil and ecuador are having tremendous trouble in terms of controlling the outbreak. Huge numbers of cases. Other countries have been able to control that with a rigid and active surveillance for the virus, testing for the virus. Several countries in south america are concerned. The emerging problem in africa is also some concern. Kitse there enough testing and the emerging market economies . Is that a worry that we dont exactly know what is going on . The number one worry is the number of tests and right behind availability of good laboratories that can run those tests in a timely matter. Those two things will make it incredibly challenging for some countries to really respond well isolation, testing, and Contact Tracing that are needed to control this outbreak early. What can you tell a tell us about the end of lockdown . We are seeing the big economies of the world reopening, some slowly and some less slowly. When we have a better idea of the situation . This is one of the challenges with this virus. It can take anywhere from 12 weeks to show symptoms and your infectious for seven days. The lad between when cases start to come up is significant. You are seeing some small spikes in states in the u. S. That are loosening their economy and some states are doing a little better but we really wont know until two weeks from now 23 weeks from now. One final question. I dont mean to be trite about it. How safe will the beaches be this weekend . What are your thoughts on heading to the beach . Up as somemies open these social distancing social distancing should still be in place so people need to be careful about keeping their distance. It is great to get outside and do some activities to try to enjoy yourself. Social distancing and Wearing Masks will be an incredibly important thing to do irrespective of what your activity is. I know that is a bit odd to say that about a beach but maintaining social distance is a critical thing as people start to get out and get back into some sense of normalcy. Johns Hopkins Bloomberg school of Public Health professor. I want to show you the situation in hong kong. It is a red storm warning. It looks pretty dire out there. Markets and bit of a turmoil, we are lower on the hang seng. This is bloomberg. Staying connected your way is easier than ever. Youre just a tap away from personalized support on xfinity. Com. Get faster internet speeds with a click. Order xfi pods to your home in a snap. Or change your Xfinity Services with just a touch. All in one place. Youre only seconds away from all of that on xfinity. Com. Faster than a call. Easy as a tap. Now thats simple, easy, awesome. It is almost 11 00 a. M. In singapore. Asiome to Bloomberg Markets a. China says the markets will decide. It does not want to threaten reaffirms taiwan is a redline. Hong kong braces for more turbulence. Japan is ready to lift the state of emergency in tokyo. The government says there is no need for further restrictions. Ahead toe are looking the reopening in tokyo. Up 1. 5 . The rest of the market is more mostly higher for the regional benchmark. The hang seng, we are swinging between gains and losses. This is perhaps the session lows we have seen as we see more violence returning to the city. Ononstrators hit the streets the back of this National Security law that was introduced. The csx 300 feeling effects about as well. Taipei marginally lower. We do have many Southeast Asia markets that are closed here as we mark the end of the ramadan holiday. Lets look at where we are in terms of the currency market. It is a lowvolume day. Several asian markets are in holiday. The u. S. On memorial day weekend. Yuan at the lowest level since 2008. Tensions between the u. S. And china. The dollar slightly higher at this point in time. Risk aversion taking momentum. Emerged from the lockdown. We have the aussie continuing rising u. S. China tensions could put the phase one trade deal at risk. Take a look at where we are in terms of oil. Oil ending higher. It took a breather, expanding those four weeks of gains. Investors say be careful with the prospect of recovery. Prettye for risk today muted. Worde lets get the first news with Karina Mitchell. 1. 3 ronavirus cases jumped in a day which was below the one week average at the u. S. Closes 100,000e milestone of deaths. President trump has banned arrivals from brazil. Japan is to lift the state of emergency in tokyo with the government saying there is no further need for restrictions in any part of the country. Approvedry panel has the panel to end the emergency and the capital. Tokyo reported 14 new infections on sunday. North Korean Leader kim jongun is testing relations with the west for a step up in his countrys nuclear capabilities. Reappearing after several days out of the limelight, he told military leaders they should boost north koreas arsenal. State media did not see when the meeting happened or exactly what he wants his updated Nuclear Strategy to be. Taiwan is ramping up tension with china by expressing support the move will seriously threaten the citys future and erode core values of democracy and judicial independence. She says a promise to keep hong kongs economy for 50 years following the handover is on the verge of bankruptcy. 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. Yvonne chinas foreign minister is urging the u. S. To give up about Wishful Thinking of changing china. Lets bring in our china correspondent selina wang with the latest. What is the message they really sent . The foreignart of ministers annual briefing. He is warning some Political Forces are hijacking bilateral relations to push the two countries towards a new cold war. Relations between the two countries continue to reach a new low. China has no intention to change the u. S. While it is impossible for u. S. To change china, the u. S. Is not able to stop the process toward modernization. Some u. S. Political forces are hijacking bilateral relations. That is being exacerbated by the National Security law. He said this law would not affect the cities high degree of autonomy or the legitimate rights to foreign investors, he cautioned the u. S. Not to challenge chinas redline when it comes to taiwan, which beijing considers to be a province of china. Mike pompeo broke tradition last week and congratulated taiwans president on her second term inauguration. The foreign minister added the ramification between the two sides is inevitable and no one and no force can stop it. Haslinda protests are back in hong kong over this National Security explanation. What is the next step for china . We saw thes biggest protests rallying against his National Security law. We are expecting similar demonstrations for later in the week. The National Peoples Congress Delegates will be reviewing the draft decision of this National Security law and they are expected to come to some decision next week. The foreign minister said after the approval, the details of the law would begin. He also reiterated that hong and is an internal affair did not address possible retaliation from the u. S. He said options, sanctions, tariffs on hong kong goods and banning technology sales. Another possible move could include stripping hong kong of that special trading status. This would hurt american businesses that operate in hong kong. Bloomberg tv just had an interview with the former u. S. Treasury secretary and he made the point that revoking the trading status will be punishing the victim without damaging china. Wang. Da selina still to come, india is set to allow domestic flights for the first time in two months. We will speak to the had of the air association of india. He says the government is making a mistake in putting lives at risk. Yvonne why investors may be ignoring reality by pricing in speedy economic recovery. This is bloomberg. Yvonne in response to the violence we saw in the city over the weekend, critics are ignoring the reality that hong kong is part of china. This is also a response to foreign politicians and their criticisms. They say it is alarmist speculation. This is a response to comments we heard from the u. S. Secretary of state mike pompeo calling us a National Security law a disastrous proposal and did indicate it could lead the u. S. To reconsider Hong Kong Special trading status. It seems like the Hong Kong Government is coming back with the statement. They say hong kong must never become a base for subversive acts. Still seeing a high degree of autonomy that were main intact that will remain intact. Our next guest markets have run ahead of reality in pricing in a speedy recovery. Eleanor, we have heard a lot of strategists that have talked about the disconnect between the fundamentals and what we are seeing in this risk rally and we continue to see this go through. Tell us a little more about why you are not chasing it. Eleanor there is a wide range of consumer and economic probabilities that remain. It is a key question of will the liquidity we have seen from buy bankers bias time us time and they buy us a bridge but they do not by us solvency. Impactard to predict the on Human Behavior that this pandemic will have and that will on the shapel role of the recovery. How theont know second wave, job insecurity are going to affect consumption behaviors and how deeply they will dampen confidence and spending. That eeing in china if we look at the mobility data, mobility is increasing during work hours. Businessesg to have facing prolonged social distancing measures but they consumer post pandemic and lockdown. That means there will not only thatncy issues scenario is not fully reflected in Market Pricing and it is an inertainty that we dont see equity markets. Question it is rooted in the abundant liquidity we have seen. Mo. Ittle bit of foa biased to theed upside. We have that bearish fundamental w but the technical view and the s p, we are still not there market retracement zone. Still in that market retracement zone. Where still in a paradigm we are still in a paradigm where we have the fight between the bulls and the bears. Yvonne perhaps this rally we have seen is not quite broadbased. You see volatility coming down in u. S. Stocks and investmentgrade spreads. You are seeing parts of a elevated. Market, emf what do you think it will take for the riskier parts of the market to catch up . Eleanor you need that confirmation that not only are we not going to have a second wave of the pandemic outbreak but we are also going to have the most optimistic vshaped coming toarrative fruition. That is an uncertainty that we dont have any clear clues on just yet. It is not something we want to bet on until we see more evidence that we will have a more positive narrative. If we look at the price action last week as it relates to tensions that reencapsulate the view that those fundamental markets. Re not driving data, theook at that results are not conclusive and would rather put our trust it is going to be a 1218 month timeline for a vaccine. How quickly can you really have everyone vaccinated . In that sense, it is going to be a lack to reopening lag to reopening reality. China is warning of a new cold war. Deglobalization could be the new normal. Is it a tradable theme . How can you position for that . I think in terms of deglobalization being a tradable in there are certain terms of something that is more longterm, if we look at the paradigm of inflation being nowhere to be seen, if we look toward a moreding reality were supply chains are becoming more localized, you certainly have the risk that deglobalization could perpetuate. Ith lower inflation it sees a reversal of that so not since you can look at Precious Metals so in that sense you could look at Precious Metals. Precious metals are likely to do. Ell thoseg against centralization of financial markets. You have industrial demand going forward. In that sense, we see an upside to silver as well. U. S. China those tensions, markets are complacent to the mounting tensions. The u. S. China entanglement rolls on. Each day, we have new evidence that the relationship is permanently changed. Yvonne you seem to be quite bearish when it comes to equities. You are focusing on the fx side. Eleanor if you look at fx, it is clear volatility is back in to the fx space. Bydo have a Market Driven the positivity of the slowing covid case growth and expansion in liquidity at the moment, we do maintain the opening and unemployment realities are going moreme to fruition once and the reopening realities are going to lag behind expectations. Given that we have a little bit , we do seeomentum downsideties on the and in terms of playing that longerterm option, we could see decent risk award if we see a spike in volatility, whether we see tensions mounting or whatsoever. Yvonne thank you, eleanor. Joining us on the line from sydney. Japan ends its state of emergency as coronavirus cases continue to decline. This is bloomberg. Haslinda japan is set to lift the state of emergency in tokyo and surrounding areas later today as coronavirus cases continue to decline. Despite the relative success of fighting the outbreak. Lets go to Isabel Reynolds in tokyo. What will the lifting of the emergency mean for tokyo . The emergency itself was basically how it was dealt with, down by region. Things could be different in different regions of the country. Tokyo authorities have played out guidelines for threephase return. Phase one, which is likely to begin tomorrow, will mean libraries and museums can reopen and professional sports games can be held without spectators. Schools will gradually reopen. It does not mean tourism either domestic or international, the government has said they want people to avoid traveling to other parts of the country. Japan is expected to be are enclosed to foreign visitors for quite some time. Yvonne japan has faired relatively well. Among the g7, they have been the best in terms of the number of coronavirus cases and doubts. Coronavirus cases and deaths. When you look at shinzo abes approval ratings, it does not reflect that. Fallen to a record low. I think we can see two or three factors. Although the result has been as slow has been seen to act. So to declare an emergency in the first place and slow to block travel from china, which could have prevented some of the initial infections. There have been huge delays in getting cash handouts to people who need them. Scandal, an another series of scandals over the years, mostly relating to things that seem to be he is trying to help out his cronies. The latest one is changing the retirement age for prosecutors in such a way that critics say it could enable him to get his top favorite persons top prosecutors jobs. Relevance bel Isabel Reynolds in tokyo. Huawei asked for guaranteed supply amid mounting pressure from the u. S. To isolate the chinese company. While weight requested huawei is among the biggest contributors to chips. Bain capital is preparing a second round the proposal. It has the strongest case of any part it is one of four in the the coronavirus hinders demand for travel. Look atlets take a markets in china. Marginally lower. 1 hang seng down close to on more tensions between the u. S. And china. Hong kong very much playing a factor in that. This is bloomberg. Haslinda you are looking at live pictures of the lion city. We are in the middle not really in the middle of the trading day. It is expected to announce another stimulus package to help the economy. Gdp out this week, likely to show a contraction of almost 2 . On the screen you see gold trading down. Expectations gold will trend higher given risk in the market. Lets get first word headlines from Karina Mitchell. China says they will never return, let the market decide its future. Speaking on the sidelines of the National Peoples congress, the foreign minister said china does not want to change the u. S. And warned the Trump Administration to stop thinking it can change china. He denounced adrift towards a new cold war and warrants washington not to cross and warned washington not to cross the redline that is taiwan. China has no intention to change the u. S. Picked it is impossible for the u. S. To change china. Some Political Forces or hijacking bilateral relations. Arrestingng police 180 people after using tear gas and Water Cannons during a protest against chinas latest move to crackdown on dissent. The biggest rally since the coronavirus act outbreak came after beijing announced National Security law the territory. Legislative the Hong Kong Government says the protest proved the need for the new security measure. Regimen netanyahu has become the first israeli Prime Minister to face a criminal trial while in office, denying a series of charges relating to fraud and bribery. A week after being sworn in for his term, he appeared in Jerusalem District court to deny any wrongdoing. He is accused of coercing israeli media to give him good press and says the whole case is a left wing scam. Thousands of homes and businesses are without power in Western Australia after the strongest storm in decades. A weakening cyclone and a cold front combined to bring went of 100o 100 wind of up to kilometers per hour. 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. Relations between china and the u. S. Are back and focus after beijing made moves to impose a controversial National Security law in hong kong. Become much more aggressive on the international stage. We should not be calling this a trade war. This is exactly the type of confrontational developments on both sides of the relationship that you would expect in cold war. Not only are the American Companies that have a supply chain problem but it is the Chinese Companies as well. It captures the challenges of the u. S. China relationship this year. China is going to be a central focus in the u. S. President ial election. Both joe biden and President Trump have advocated relatively hawkish position toward china and china trade. The u. S. On the u. K. Will be taking the lead on this china issue. What you hear increasingly, we have to draw a line and this line, the line has to be firm. Over the weekend in hong kong, over hundred people were arrested as protesters denounced chinas new security plan. Stephen engle watching all the developments. Fromve seen the reactions the demonstrators andhe politicians abrd. It is the battle of narratives because there was quite a sharp reaction on the markets and late last week after beijing made all indications they will push forward with its own National Security laws for hong kong, pretty much bypassing the legislature, which has been unable to pass article 23, the controversial antisuccession part of the basic law that is required to be passed by legislature but has been unable to do by subsequent Hong Kong Governments. Beijing is doing this and after the market tanked 5. 5 on friday, global leaders, including the white house, expressing concern. Mike pompeo saying this is a death knell for hong kongs economy. We are getting comments from chinese officials and the Hong Kong Government has put out a statement saying hong kongs high degree of autonomy will remain intact. This is a statement put out in response to foreign politicians was near concerns over this national law. There is a trust deficit between the hardline progovernment prodemocracy advocates and the local government and beijing. The Hong Kong Government put out a statement saying the protest that we have seen demonstrate there is a need for this new security measure. Then again, we are seeing officials in china trying to assuage the fears of hong kong people. The vice chairman of the chinese parliamentary committee, on saturday, she said this antisedition law will not be used the opposition is trying to strike fear in the minds of hong kong people. We also heard from chinas vice premier, he said local rights and freedoms would be protected. Yesterday, the foreign minister of china tried to assuage the fears of hong kong saying it will not affect the high degree of autonomy hong kong enjoys. He said people should have more confidence in the future of hong kong and dont worry too much. There is a trust deficit so they dont those who went out on the streets and engaged in violent acts against the police do not believe what their local government says and what beijing says. A prominent activist said we must stand up and fight and let beijing know that we will never surrender. Steve, a key question is how the u. S. Will respond to beijings move. Do you have any idea what will happen . They could take a number of different options. What actions they take against hong kong would probably hurt hong kong more than it could potentially hurt china. If they revoke the favorable trading status hong kong has, as has been threatened, that would threaten the people of hong kong. We have heard those in china who use the favorable trading status and the lower tariffs in hong kong to do their business as well abroad. It would hurt beijing but it would hurt the people of hong kong and the economy here, which has suffered immensely to the protest for 11 months and two or three months of lockdown. Where the white house will stand, we dont know yet. Donald trump us and they will keep a close eye on it but there are bills being debated or introduced on capitol hill that could potentially punish the chinese if they go ahead with this, which seems like it is a foregone conclusion given the rubberstamp nature of the peoples congress. Haslinda stephen engle. Indian airlines given the goahead to fly again. Thegovernment seeks to get economy moving. This is bloomberg. Haslinda domestic air travel resumes across india despite the number of coronavirus cases rising by record on sunday. Several states negotiated with the Civil Aviation minister to limit the number of flights. There still seems to be a lot of can click confusion as to who is allowed to fly. Airpresident of the Passenger Association of india. Good to have you with us. It sounds like it is a grave mistake. Are you advising travelers not to fly . Appreciate the fact that many passengers, many citizens who are stuck in various cities for the last 16 days who are away from their families. Probably, for them, it is an opportune time to fly back to their destination. The whole thing happens in very messy fashion. They said they would leave resume domestic operations the 25th of may. Each state has come up with different regulations and many flights were canceled Early Morning today. They haveve discovered their flight has been canceled due to various reasons. Haslinda what are you most concerned about . Pardon . Haslinda what are you most concerned about . If india decides to let travelers fly again . We are most concerned about the regulations laid down by each state. That is something that no air traveler would like to undergo he must have a valid reason to travel. We are very concerned as to how long they will continue this quarantine. Many of the states have introduced corn time quarantine. That will increase the time they will be spending at their arrival destination. They will have to pay for quarantine. Nothing is really clear about air travel within the domestic sector. Heard some rules and regulations, screenings at the airport, no checkin counters, only web checkins, ppe will be bag, given out. No meals, for example. Do you think these Safety Measures are enough to keep passengers safe . Are proper precautions being taken . Now,e feedback we have passengers seem to be quite happy with the various procedures laid down and they are saying it is not really complicated. That is because these people are desperate to travel. Those will those who will have to travel later on for work will find it complicated. And somehem are good of them are complicated. Week, things a will change and they will get into a situation where it attracts more people. Today im told, the flights were canceled because of lack of passengers. It is a sad situation. We dont want that to continue if domestic operations have to continue. Concern there was confusion in Domestic Airlines resuming operations, are you getting any indication of International Flights returning soon in india . No. Minister on the same day we are at a loss to understand how this can happen. We hope many passengers who are stuck in india can get their to go on international destinations. Thea we heard from cost of tickets could go up eight to nine times due to social distancing measures within the airplanes. How are you trying to put a lid on the cost for tickets in india . What are the discussions like now . International or domestic . Domestic, as they resume flights. Is regulationhere on fares. There is a minimum and a maximum. The average minimum and maximum should be 40 of the ticket. There are some restrictions on what the airline can charge. That has worked well in some sectors. Yvonne go ahead. Some of them offered tickets much lower than regulators. Is tryingink anyone to fleece the passengers. Yvonne thank you so much. That was the president of the air Passenger Association of india. Lets do a quick check of headlines. Aiming to deliver to 200 cities currently in lockdown. Geo mart has run a Pilot Project and is expanding. It is a step closer to challenging amazon and walmart. Lufthansa bailout is stumbling, talks with the european union. Final details include germanys exit from the direct state. Some report saying the funds up lufthansa with a say three year deadline. Would face a three year deadline. Experimental andnavirus virus was safe the vaccine stimulated production of antibodies that can stop infection along with immune t cells. Further research is needed to show its effectiveness against the virus. Coming up, the virus caused a split in the ruling party . The opposition seems to think so, saying the government was too slow to act. We will have that next. This is bloomberg. Haslinda thailands Opposition Party says the government was too slow to respond to the coronavirus pandemic and the slowness may spark a fracture in the ruling coalition. Why the pandemic there is talk from the largest Opposition Party in government that the Current Administration acted too slowly in its response to the economic crash brought in by covid19 pandemic. There is more than a dozen parties after a disputed election last year. Thailand is currently facing its worst Economic Contraction this year since the Asian Financial crisis and that is led by the tourism and trade industries, which could see up to 10 million jobs lost. The party leading the Government Coalition has rejected claims of internal discord and say the Prime Ministers response to the crisis is outstanding. Critics are saying more still needs to be done. Be a lot ofeems to questions after whether this alliance can continue. Are we expecting to hear more antigovernment protests could flare up . Pandemic, there were already antigovernment protests. Students were protesting about general lack of opportunities. The state of emergency nighttime curfews and social distancing measures announced in march has put a pause on physical gatherings but the satisfaction migrated online instead dissatisfaction migrated online and said online instead. Emergency was extended until the end of june and wants the government is looking to ease lockdowns to kickstart the economy so experts are saying a lot of the protest movement that was put on hold earlier this year will return and intensify at the end of the lockdown. A check of the latest business headlines. All of its restaurants in the u. K. In ireland have been shut since the end of march with their majority with the majority of workers for load. Furloughed. Said to be among suitors for ebays advertising business. Ebay shares climbed. Amazon Aircraft Service thatting a will rival. While other airlines are downsizing, amazon is on an upward timetable. That willspeculation spread to ups and fedex. Spacex has completed final preparations for the launch carrying two out two astronauts to the International Space station. Flight will be the first u. S. Manned launch since the Space Shuttle was retired in 2011. Nasa has had to use russian rockets. Take a look at markets before we go. Seems like a mixed picture when it comes to asian equities. We are seeing the signs of whenncies with volatility it comes to the rmb. Pboc with fixing of the rmb. U. S. Dollars slightly higher. A mixed bag when it comes to equities. More good news that they will be lifting the state of emergency in tokyo. Hang seng, down more than 220 points right now as violence return to the streets over the weekend. Spi still looking favorable. Lots to look ahead to with pmi data ahead. It from that is Bloomberg Markets asia. Bloomberg daybreak middle east is next. Stay with us. This is bloomberg. The following is a paid program. The opinions and views expressed do not reflect those of bloomberg lp, its affiliates, or its employees. The following is a pay presentation brought to you by rare collectibles tv. Mercury dime is considered to be one of the most beautiful u. S. Coins produced during the american coin renaissance of the early 1900s. The american coin renaissance started from Theodore Roosevelts belief that a countrys coinage representatives status