We were hearing that we could see some candlelight vigils later on tonight, people going online virtually. It comes amid hsbc defying the u. K. And backing this National Security law. And the corporate impact of all this as well. Lets check on the markets, they seem unphased by what were going through here geopolitically and what were seeing in the u. S. The protests have calmed down a bit in the last two days or so. Markets off the highs but were trudging higher today. Mobile stocks on track for a ninth day of gains. Jakarta coming online and continuing to trend up, 1. 3 . U. S. Future seeing a little bit of pressure. The airlines, the nifty with modest gains at the start. Haven,rally and bonds a selling all. You did see yields picking up here. The aussie, back to 1 once again. The chinese 10 year yield, now or near february highs. The second worst performer after bulgarian debt, on disappointment that beijing may refrain from stimulus. About somebts opecplus deals. Watching the currencies as well, the dollar getting a little bit of gaining a little bit of steam after five days of gains across the board. Euro come the aussie were big winners this week, selling off just a bit here. To hear moreted steamers and extend in the bond program. The aussie hovering around . 69 and the renminbi at 13 times. Tom weve got an update on the airline story. China will allow more Foreign Airlines to resume inbound flights. The u. S. Is looking to put those restrictions on chinese carriers because the u. S. Was concerned with access to the Chinese Market. In the airlines excluded earlier plan can operate one International Commercial passenger flight to china per week starting june 8, thats from the administration in china. Lets get more details, and will speak to Stephen Engle are our north asia correspondent about this. Steve, got the latest line on this. Give us an update on what to restrict Chinese Airlines. Which airlines are impacted . Forhen it mostly impacts the Main Airlines that have overseas routes. Air china is the Biggest International carrier in china, but also china southern. It doesnt necessarily mention the troubled airline or some of the other regional carriers. Basically this is the Trump Administration issuing the order suspending passion fights into the United States by mainland carriers that i just mentioned. In retaliation for beijing barring american carriers from reentering the china market following the coronavirus pandemic. Were seeing those headlines crossing that china may be moving in response to that, but we still need to flesh that out in more detail. The trump order is effective june 16, but the Department Transportation is saying trump could act sooner if he so desires. Now, we stand right beijing prevented carriers, those four main have maintained flights, albeit on a limited basis to the United States. The new trump order stopped short of an outright ban that allows chinese carriers to operate one flight to the u. S. For each plot that china that china grants to u. S. Carriers. It looks like china is responding in kind. If we let one, you let one, etc. Yvonne debate over the National Security law for hong kong, now we have some Big Companies backing beijing. Tell us a little bit more. Stephen this is a tricky one as well. We saw this during the summer of unrest last year with Cathay Pacific and other carriers having to kind of acquiesced to the desires and demands of mainland china. So this is being pretrade by the andest clan that hsbc Standard Chartered bank into british banks have sizable businesses here in asia and Greater China and the mainland in particular or perhaps kowtowing to mainland wishes, because hsbc in particular was in the spotlight and they kept their head below the parapet at this time. They have not come out in support oregon against the National Security legislation. We got a blasting last week from the former chief executive of hong kong. Hsbc was the target of so many protests last summer because it had frozen or closed funds that were raised to support the protest movement. Protesters thought they were curbing the rights of protesters to have their constitutional rights. Hsbc said that close those accounts for technical reasons. Sue, branches were torched we had to facing of that two lines in front of the headquarters. , somewhat understandably, cap there had low, but now they signing aseen petition in support of chinas proposed security law. Vigil thatss normally takes place in hong kong has been banned this year. What are protesters claim to do this year instead . Stephen its the 25th anniversary of Tiananmen Square. The Legislative Council will be voting on the highly Controversial National anthem bill. It could potentially go down in history for being passed on june 4. The irony and the symbolism is not lost on the protesters. But the vigil will not go ahead as planned, as it has the last 30 years since the First Anniversary in 1990. Tens of thousands, if not more, usually gather in Victoria Park or candlelight vigil. It is a big part of the calendar here in hong kong. However, please have banned it. They have not approved the application because of the social distancing laws that are still in place that basically prohibit groups of anything larger than eight from gathering. Sayingine arrangers are go out into your local neighborhood and have your own small candlelight vigils, go online and commemorate. Protesters are worried that because of the National Security laws that are likely to be imposed, possibly via as early as august, that last years commemoration could be the last. They could potentially use the new National Security legislation to ban future commemoration. It goes to the heart of the National Anthem law thats likely to be passed which would criminalize and give jail sentences potentially up to three years if you insult china through the use of the National Anthem. It just begs all kind of questions on the legal front, because you have freedom of speech here. You cannot libel or slander people, but insult is a gray area, very vague. Yvonne theyre still debating that National Anthem bill. Stephen engle there was an update. First defenseps secretary has ripped into his former boss saying his response isthe nationwide protests dividing the u. S. , not even pretending to bring unity. Its a ninth ninth consecutive night, albeit less violence. The president said he may not need to order in the National Guard, but will do so if necessary. We have very strong powers to do it. The National Guard is customary and we have a very powerful National Guard, over 300,000 men and women, and we can do pretty much whatever we want as far as going beyond that, if its necessary. Yvonne the white house says mark esper remains defense secretary, despite his opposition to using activeduty troops to confront protesters angry at the killing of george floyd. Saying it would be a last resort. The comment is said to have annoyed President Trump and top aides. He remain secure in his job until the present loses faith in him. Sister delivered a warning in a Statement Given to the official news agency. She has been increasingly or andble in Daily Affairs blames what she calls a propaganda balloon in north korea. Still ahead, as chinas china security law comes closer to reality for hong kong, we speak with a prodemocracy member. Tom trump is saying he will oner expedited permitting thursday. We will try to get more details on what exactly that means, coming up on the show. To barclays asiapacific head about his plans to for customers in the region. This is bloomberg. Yvonne global banks are drafting plans to bring step back to the office as countries emerge from the lockdown from covid19. Barclay will start the program next month. Many traders with employees working from home at least until september. Thanks so much for joining us. Like many banks right now, regional execs like yourself are should with deciding who come back to the office, went to resume Business Travel, and of course all the way down to how many people should be in the elevators right now. Tell us a little more about the barclays roadmap for getting people back to work. Jaideep thank you very much for having me this morning. As we think about getting employees back to the office, first and more important [indiscernible] is employee safety. How many employees it is safe to , and we will remain sensitive to the situation on the ground in each country. All the way across japan, hong kong, china, singapore. There are circumstances in each of these markets that are quite with infection rates and we are proceeding extremely consciously cautiously. A number of our competitors are bringing step back to the offices. So in response to your question, its about employee safety, but what we found in the last couple its given us opportunities very effectively for working from home. On job safety and how to bring people back. Yvonne a number of bank execs have said that staff can continue to work from home in the post covid area, reducing the need for office space. Where are you on that debate their, and are you considering these issues now . Jaideep yes, we certainly are considering some of these issues. The past couple of months have demonstrated the benefits of working from home. However, there is a certain , sharingpect information with colleagues,njoying the Office Environment and replicating the best technology. So we hope to return the bulk of our employees back to the office. But in some places, we may be. Orking exclusively from home [indiscernible] morenk there will be acceptance of working from home. The when you look across aipac region, where do see the key opportunity for barclays at this point . I remain very optimistic about asia. [indiscernible] we have been through several. Ycles weve seen strong growth in , china, and japan. Optimistictremely about the longterm prospects for asia. The larger component of steady iswth of the Global Economy very aspirational. Specifically, we are present in all the principal markets. India is a market where we have very strong business. In australia and japan, and singapore as well. Tom has the pandemic in any way changed your expansion plans for the Chinese Market . The dynamic has really bolstered our confidence, our approach for asiapacific. [indiscernible] we focus our strength on where across asia. Lue we have a large client base. The pandemic has not changed our and we continue to focus on all the markets we operate in. Yvonne in the last one he for hours we learned banks like hsbc backedndard charter have beijing on this National Security bill. How is barclays approaching this sort of tugofwar were seeing between the west and the east right now in china . Does it lend itself to reconsidering your position there . All of asia and china are strategically important to barclays. We will continue to serve our clients, our international asiapacific and opportunities in china. And to access the international markets. Were following very closely the developments between the markets. We try to show them the best opportunities for them. If we continue to see protests here in the city, how does that impact hong kongs Financial Health . [indiscernible] equally, security and the rule of law is very important because it provides stability. We are following the developments extremely closely. Hong kong is an important thencial center and we hope andets begin to settle down china, hong kong, and the region , working on the opportunity to help the economy. We believe hong kong will remain an important financial center. Tom just to confirm, you havent had any discussions about changing barclays presence in hong kong . Thisep absolutely not, at point. Tom lets talk about the business, then. Where do see the most activity . Ipos . Derwriting, where is the real buzz this month . Where are you making money . Jaideep the first few months of the year were extremely strong for barclays. Largely corporate and investment banks, and of Private Banking presence in india. A great deal of activity in some of the macro markets. [indiscernible] very high issuance of volume, it slowed in march and april. That by the end of year we should be able to match a kind of volumes that we saw. So the macro business has had a very strong performance. [indiscernible] as a look ahead ,onsequence of the pandemic stress on the business model,. Ill see more opportunity barclays has lost more than a dozen top traders at your treasury desk in the last eight months and only have been able to fill some of those position so far. You dealing with your clients during this diversion and getting more business for the bank . And for the u. S. As well . Weve had significant , ons across the platform the trading and distribution side and across the division and hong kong and japan, pretty much in each and every one of our geographies. Activity inncreased the first few months of the year. [indiscernible] there hasnt been a backing away of fulfilling our responsibility to our clients. We have been managing this effectively. ,vonne thank you so much barclays head of asiapacific. Thanks for joining us for the first time here on bloomberg television. We have plenty ahead. U. S. China trade tension and the hong kong National Anthem bill is currently being debated. A few more markets opening up here in the asiapacific. As we approach the lunch break, pretty much flat right now. Plenty more ahead. This is bloomberg. You say that customers make their own rules. Lets talk data. Only Xfinity Mobile lets you switch up your wireless data whenever. I accept 5g everybodys talking about it. How do i get it . Everyone gets 5g with our new data options at no extra cost. Thats good. Next item corner offices for everyone. Just have to make more corners in this building. Chad . Your wireless your rules. Only with Xfinity Mobile. Now thats simple easy awesome. Switch and save up to 400 a year on your wireless bill. Plus get 200 off a new Samsung Galaxy s20 ultra. Tom welcome back, it is 10 29 in beijing. Here are your first word headlines. The Trump Administrations is wrapping up tensions with china, sending access to mainland airlines and what it calls retaliation for u. S. Barriers being barred. Airlinespped american from flying to china during the coronavirus pandemic, although chinese tariffs continue to service u. S. Airports. They rose on signs that travel demand is starting to recover. 10 Million People in the city of will hand have coronavirus at 300 are carrying the infection. , butng does not count still requires people to selfisolate. Wuhan was rotavirus was first reported. Cities around the province have suffered the majority of cases in china. Japan is weighing options to back the postponement of tokyo olympics. And reducing the size of official ceremonies. Athletes may face mandatory Health Checks, with movement around the Olympic Village cut back. Canceling the games next year would be the worst case scenario. British banks top say they endorsed chinas plans for a new security law in the city, saying it will help maintain economic and social stability. Hsbc and Standard Chartered are the onethe move, saying country to system principle is at the core of hong kongs future. Has london offices, but makes most of their money from asia. A quick look at the markets. It looks like we are wrapping up the trading week on what has been a very euphoric week when it comes to risk. You take a look at the Southeast Asian markets. We are still looking pretty good. Manila is seeing gains of 2. 6 . Youre watching some of the north asia regions. The hang seng right now. We were up more than 1 and we basically erased everything. We are around 24,276 for the hang seng. Chinese stocks are flat. U. S. Futures are lower. Nifty, india could be joining in on a little bit of risk sentiment that is weakening here today. We are watching out for other assets. The dollar is gaining some strength right now. Have stabilized after the selloff we have seen. 74 business points for u. S. Tenure dollar is gaining. We see wti and brent at a lower rate. We get closer to what we will get out of the opecplus deal. People are still waiting for that. Tom more divisions. The oilore divisions in market, particularly when it comes to opec. Sorry to interrupt you. Mliv asia joins us for more on the oil story, and other factors moving the market. We are seeing some discord at opecplus over these production cuts. Does it threaten oils rebound, or does th standby [standby] for many of the groups and menus members to cover the budget. It looks like its important for the supply curve to help the rebalancing of the market get into action. There are still some lingering risks. Like resources a return of covid 19 outbreaks in a return of shale production. Optimism over economic reopenings is a stronger than , itcted recovery in china should keep the product prospect for sentiment in oil to come for quite some time. Yvonne what about the positive sentiment for stocks . It seems like things that used to matter dont really matter anymore in terms of bringing down the market. What are the key drivers you are looking at right now . There seems to be some in the way of major headwinds to derail this rally at the moment. The weaknessven lately. It is helping to kick keep the positive boost alive. It has been showing remarkable resilience or the negative drivers, social unrest in america more recently. I think this all comes down to the fact that markets are more , bothd on stimulus monetary and fiscal globally, which could help the economy correct the damage as more economies reopen. Thats from the volatility from the fix index down quite a bit from the march peak nearing the previrus levels. Equities have already recouped a chunk of their losses. A result, valuations involveds seem to be in unprecedented monetary easing. Unprecedented monetary easing will be in focus when we switch to ecb later today. What are investors hoping for for the ecb . Sungwoo the euro will be in focus since they hold the Rate Decision meeting today. The central bank is boosting its purchase program. A far it has seen less than third for 750 million euro already allocated. The euro has rallied pretty rapidly. Investors would be keen to see whether they can sustain the rally against this. I think anything short of any stimulus could disappoint the market gains that we have seen. That was our mliv asia editor. Coming up, moving closer to reality for hong kong. We will speak to prodemocracy lets come member next. The Economic Freedom is being threatened by beijing. I think now is the critical point not only seek support for the general public, its also important to have protests. Hong kong is the best place to do business on the one country to system. We need to see the same. I would say people in hong kong, sooner or later, will realize the National Security law is not against one country, to system, it is designed to make sure that one countrytwo system will continue to flourish up to 24 7. Some of our guests theyre speaking earlier on the hong kong issue. Hong kong lawmakers have been discussing the bill on the chinese National Anthem. That is expected to be passed. This comes as hong kong protesters plan to commemorate the sentiment square massacre. Joining us is the legislative ofncil member and convener pandemic. Thank you for your time this morning. How do you read what is going on in hong kong today . Where does it lead your movement and uraniums and goals . Goals . Your aims and it is a very big culmination towards the june 4 massacre. Vote on thed to National Anthem me off nass that National Anthem wall. And we have a law of coming very soon. It is like a very strong reminder that, first hour one countrytwo system concept is he. Secondly, our freedom and rights are being intervened by, not only the government, at the same time, the Chinese Government. Tom how concerned are you that the United States has lost a moral authority, given the headedty we have seen out to some protesters and journalists as well . To what extent has that weakened the support the u. S. May have been able to give you and other supporters of democracy in hong kong . Tanya there are some disturbing scenes, but at the same time i. Nderstand the movement in u. S. In fact, getting more and more peaceful. That reminds us about the police junelity last year, since of last year. Government should take good care of the citizens. But at the same time, it is very important for the government to take action for example, like to investigate into the police brutality, and at the same time, to remind people and to ensure people can protest because this is their right. Do you think the prodemocracy camp is putting too much hope that the u. S. And Foreign Countries will step in . ,ven if the u. S. Does withdraw that ultimately does hurt hong kong. For a legislator, we in hong kong are trying our very best to raise our concerns, but of course we have some constraints, because our government is not holding any kind of consultation. The consultation will begin in shenzhen in beijing. Pickedme people will be by the government. For example, like the president of the legislator, who comes from the proestablishment camp. Refused tornment listen to the hong kong people. Well, for the legislator in hong kong, we are trying our very best to raise local concern, but at the same time we would like address the concerns from the interNational Community. We are putting emphasis on everywhere. We do understand that the National Community has great concerned about the National Security law. So we are trying to explain to regarding, especially the possible intervention of our rights and freedoms . Yvonne but you have some of hong kongs Biggest Companies,. He likes of lee cashnet now approving his National Security legislation. They said in a statement they are establishing the framework for National Security is very important and can ensure investments in hong kong . They are saying this can help the city stabilize and recover. Do you think the odds are stacked against the prodemocracy camp now that we have big hong kong companies, even institutions that are backing beijing on this . Tanya first off, very concerned about the published yesterday. There werebecause lots of political pressure before hand. Said the freedom of business in hong kong are not some of the very iconic figures. For example, the former chief executives. I do believe that this is some of the concerns and the business community. Suppose they can do business as long as they abide by law. For now it seems the political affiliation is extremely critical. Whether they can do business in hong kong the pens on that political stunt. This iseen unprecedented. Ofhink it will cause a lot concern, not only locally, but also internationally. Regret that you and others, other prodemocrats in hong kong did not do more earlier on to push back in hong kong . Do you accept that one reason that we are at where we are at now is because your movement failed to rein in the violence . Tanya i do believe that, for those in power, for example, the chief executive and the Law Enforcement agencies have a Good Opportunity to learn a lesson. For example, like response to our demands. For example, setting up an independent commission of inquiry in order to address the concerns, and also the i will say, to grieve the grievances of hong kong people. They are in power, and they should know what to do. I do believe that they should ,nderstand that by putting more a very restrictive law could improve the situation in hong under aause we are now very critical and sensitive situation. So, more restrictive law will only make the situation worse. Tom would you welcome u. S. Sanctions on hong kong . A full pictureve of the content of the National Security law. And i dont think i am in a position to comment on the internal affairs of the u. S. Government. But of course, hong kong people do understand that it would also affect our daily lives and businesses. So we will Pay Attention to the progress, or announcement of possible sanctions announced by the u. S. Government. Reality seems to be that china is not going to back off, despite the consequences they could have with the u. S. If that is the case, what is a clear and realistic way forward for the prodemocracy movement . Very good question. Out therying to figure future of our movement. But i believe that it wont stop ever movement. Example,y when, for they promise that under our basic law. Believe that hong kong people are very strong, and they will continue to fight for democracy. Self interest, its because its good for hong kong. Penalty this kind of law will stop us. They are very, very determined. I am still hopeful, but we need to understand the realities, and way to handlenew the future, especially how we are going to go forward. Legislative council tanya chan. Coming up, its decision day for the European Central bank. Massive monetary stimulus. We will give you a preview next. This is bloomberg. Yvonne the European Central bank is excited to boost its massive Bond Buying Program today as it tries to haul the eurozone out of its deepest recession. Our Global Economics and policy editor Kathleen Hays is here with a preview of what to expect. There are some that say that the ecb could wait until later on this year to do a boost in the pandemic emergency bond purchases. Why act now . Kathleen i think most people figure they are going to have to act. I think it is a question worth asking, is there any chance that they would decide to wait . They already have a Massive Stimulus Program in place. , thetine lagarde president of the ecb, even though the data may be bottoming, she is out of the worstcase scenario of the ecb projection. Economist recently said that damages caused to the economy by the lockdown may take years to repair. Its true that the ecb has said one third of its 750 billion Euro Pandemic Emergency Purchase Program fund. Going, it could use them up by october. That is why i think a lot of people are saying negative things about the economy. It is may be a time to act proactively, move ahead when you might need them so that they are seemed boosting my 500 billion euros. This would take all bond purchases up to 1. 6 trillion euros. I think, most importantly, its theured expectation. Thats what investors are looking for. If they dont do it now, they could cause a bond market rally. Ou can see bond yields from 3. 9 from the greek bonds down to 1. 5 . March, when they announced this program, 1. 2 down to 0. 6. The italian bond sale today was a blowout, over 100 billion euros in all kind of investors Going Forward. You dont want to upset the outlook for italy, but its the second most indebted, and they are a very vulnerable nation. Some of the through reasons of why they would boost their bond purchases, but one of but what are one of the reasons the ecb might not consider doing it . Wont use upy their funds until october. Why not wait until july or september and see how the economy is doing . See if you need to boost it. Maybe you will need to boosted by as much. Saw on the chart, the ecb has been buying bonds. That is one of the reasons that has happened, also the fact that they you is moving closer to agreeing on the element that has to go into their 750 billion euro recovery fund. That is another reason why it it faded. Market News International reported that they spoke to many members of the ecb who opposed p now. Sing the ppp there is also the slim chance it could wait. The bank of france governor said the ecb will probably need to go further. The ecb seems to signal this. The eu recovery could be watered down. You get back to that question, do you really want to risk of the market rally . I think they are going ahead and do in his 500 billion euro tomorrow, or later today. We will see what they do. Global economics and policy editor, Kathleen Hays. Lines breaking from the terminal. South korean prosecutors beat the arrest warrant for samsungs lee. Iley jai wai prosecutors in south korea seeking the arrest. A quick check of the latest business flash headlines. Americas private company is scrapping earnings reports and will no longer release quarterly results. The worlds biggest ever cultural commodity trader wants to focus on longterm strategy. It will still update bondholders and lenders every three months, but will only disclose some annual figures, such as revenue. Profits wont be included. Business is down 70 from last year. A slight improvement during the height of the coronavirus. Uber says any recovery will be slow, speaking at a virtual tech conference, the ceo said the decline in the rides business is being partly upset offset by food delivery. Yvonne taking a look at markets. Stocks losing momentum. We will get you caught up with markets later on. This is bloomberg. Its almost 11 00 a. M. In singapore and hong kong. Bloomberg markets asia. U. S. China ties at it again. Reach a new low to british banks backing beijing over hong kong. Asiapacific markets lose momentum and investors are weighing a chance of swiss swift post virus recovery. Claims of cheating among producers. From the defense secretary, white house chief of staff, we hear about the social unrest raging across the u. S. Take a look at markets right now. We are losing a bit of steam as we wrap up the trading week after what has been a buoyant week for asian stocks, as well as the equity. The dollar is up. We will see if that continues in the european session. As we mentioned before, we have seen these asian benchmarks over easing. The exception, you can see in green, the peacock in manila up over 2 . Ila why, butt exactly sure it has been up to 2 since that time frame. Erasing theg also early gains here today. It is june 4. There is the anniversary, and with the government banning that ceremony later tonight, there is a lot of tension in the city. We are hearing about candlelight vigils that could happen, but of course they are working on the National Anthem bill. We see the yield back above 1 . Said, they are making a bit of a comeback. The dollar reversing earlier losses at the back of the dollar closing at a 12 week i. An indicator suggesting the dollar is oversold. Today we will see the dollar buying continue in the european economy. Up a tent of 1 . Dollar strength needs relative weakness for other currencies. Tadre seeing the euro a weekend, easing after rising for a seventh consecutive session. The longest winning streak in almost seven years. We are awaiting the ecb meeting that is expected to have more investors. Also beginning to see some value in the regions assets. The aussie is losing momentum, down for 10th of 1 . 6896. People were worried about that 70 level. That psychological 70 level. Currently 7. 1 283 with rising tensions. To get not likely massive drops in the country, which could impact other countries. Sees the yuanrk as an indicator of global sentiment. Taking a look at oil, running a bit out of steam, falling from threemonth high to focus really on whether opec will extend its output cuts. Saudi arabia and russia have a preliminary agreement, but that is on the condition to make those cuts as well. Down half a percent. Futures in the u. S. Also pointing to a lower opening. Airne tensions in the again with the Trump Administration ordering a cult of Chinese Airline flights to the United States, in retaliation for american carriers being barred from entering the mainland market. China willrned that ease its ban on resumption of u. S. Flights to china. Another flashpoint for the u. S. And china relations, amidst disagreements over trade, coronavirus, and the future of hong kong. Our chief north Asian CorrespondentStephen Engle is joining us with more. What is china doing in response . It aen this might diffuse little bit. We learned donald trump issued an executive order, suspending passion or flights to the United States by mimi air china, china eastern and xiaomi and airlines. They are still carrying out their flights on a limited basis to the u. S. Even though the indicted states called off all its flights to china way back in january. But it had applied to have the resumption of service by as early as june 1. China did not necessarily respond to that. China allowed some commercial flights from other Foreign Airlines under what is called a 51 policy. It limited International Carriers to only one flight a week to china. Thoseited states, carriers, like delta, united and american, the big three that do flight a china, were not allowed back in, at least under that 51 policy directive. We are just learning that Chinas Civil Aviation Administration says it will ease that ban on flights to the as early as monday, and it will be reciprocal. One airline, one flight in per week. The debate over the National Security law of hong kong continues, and some of the Biggest Companies in the city at city have backed beijing. En hsbc and Standard Chartered are in between shots being fired over this issue of the National Security log. Law. Hsbc was blasted throughout the last summer for closing the accounts that had raised funds for the protest movement. The protesters thought that hsbc was siding with the government. However, they said it was for more of technical reasons. They have this National Security legislation. They did not come out in support or against it and that is from the former chief executive. Saidweek they came out and hsbc, shame on you. I paraphrase. You get about 40 of your revenue from Greater China, even though you are based in london. You need to come out and support with beijing is proposing for hong kong, even know it is highly controversial, and its something the u. K. Government has been out in front saying that they are against. Position igned edition petition that was signed. We see the picture of peter wrong signing at peter wong signing it. We reiterate that we respect to support laws and rebuild the economy. For a business here in hong kong , it does not necessarily wait into the political prey. It is a tough decision that they have to make. Whether to tout out to beijings wishes, or ending up higher because of protesters. The face of the movement said its a vivid example demonstrating how china will use the security law of new leverage for the foreign business committee. You talk about timing, it is the anniversary of that crackdown. But a mass vigil has been banned in the city. I we still expecting protesters to come out today . Stephen that is the call for protesters to come out. Youre not allowed to go into Victoria Park like they have done for the last 30 years. Your local Street Corner in her neighborhood and light a candle in commemoration of those who died, or who were cracked down on in 1989. Its something that has been part of the fabric in hong kong since 1990 when the first vigil happened in Victoria Park. It has been banned because they the sociallates distancing laws that do not all groups of larger than eight people to congregate. But of course, the protesters and Rights Groups say the government is using covid19 to curb the freedom of expression. Simultaneously by the way, first of all they do the online commemorations. That it coincides with the co of the National Anthem bill that would criminalize the insulting of the National Anthem of china, which again raises a lot of concerns in the legal community. Insult . An its not necessarily an act, its how someone perceives something you say or do. So it could be open to interpretation, obviously, and that could possibly fly in the face of the british common law system, where slander and libel are illegal, but freedom of speech is legal. The irony is not lost on a lot of people that the National Anthem bill could be passed on the anniversary of Tiananmen Square on the anniversary that has been banned. Yvonne chief north haslinda chief north Asian Correspondent, Stephen Engle. Now lets get the first word headlines. President trump secretary defense said his response to the nationwide protest in the u. S. James mattis said the person does not even pretend to bring unity. Demonstrations are continuing into the ninth consecutive night with less violence. The president said he might not , butthe National Guard will do so if necessary. President trump we have very strong powers to do it. The National Guard is customary, and we have a very powerful National Guard. Over 300,000 men and women, and we can do pretty much whatever. E want as far as going beyond that, sure if its necessary. Haslinda north korea is threatening to scrap its military ties and other joint ventures with south korea. They delivered the warning and a steaming given to the north. They have been increasingly more visible in state affairs and blames the use of what she calls propaganda balloons and drops democracy pamphlets into north korea. Weighing said to be options to scale back the postpone tokyo olympics, including limiting spectating members and reducing the size of official ceremonies or it athletes and fans it may face mandatory Health Checks with movement cut back. It would be the worst case scenario. Still ahead, asiapacific stocks losing momentum and erasing early gains as investors weigh the chances of a swift posted virus recovery. Guggenheimsfrom scott minerd saying the fed is facing a reckoning. Haslinda shaking shaken to the core. We will discuss issues facing the energy market. Plus, we hear from the former u. S. Defense secretary. This is bloomberg. Yvonne just want to recap some lines from samsung. South korean prosecutors are seeking the arrest warrant for samsungs vice chairman of the company. Capital lawolating and audit law. Hearingover what were is falsifying information in a testimony on 2015 merger. We have seen the samsung shares losing figures, but they are elevated up 1. 3 right now. There is a whole a company. A slump in Chinese Government is having a aggressive monetary easing. There has been a selloff with the yield on the 10 year near the highest since february. Our next guest says the mediumterm story is still in tact for chinese bonds. Joining us is the portfolio manager. Good to have you with us. Waiver ofecord science making effort, but you say it remains intact. There is there a sense that the selloff is perhaps overdone . Thank you for having me today. There is a decent amount of direction and this level of direction was from a pretty strong rally. There were policymakers surprising the markets by announcing that the amount of issues on these new special government bonds was going to be less them what we had anticipated. Following that strong rally we had a massive back off. A lot of the reasons behind this selloff in china is i believe there will still be nearterm headwind. They are seeing what the policymakers say and do, and they have said they will continue to support the economy with these policies. What they have done in strain a certain number of liquidity in the market. Yieldas an impact on von bond yields. And what you have seen in the chinese economys recovery. At thelly if you look recent recovery in chinas credit and polls. It would point to some of this degree of yield to be right. You cannot argue against that. Conviction really lies in the extent of the correction and how much longer it can go on. Was, we aret said within sitting distance of chinese yields were everywhere precovid. Policymakers that still want financial conditions to be relatively easy. They want to lower funding costs and allowing just allow the funding to reach the real economy. Economy in china is still uneven. Its yet to be discovered. Most importantly, ppi still and deflation. When you put that against chinese yields that are back to where we were precovid, i think longterma very good proposition. Willingnessng more the effects may pose some nearterm headwinds as well. Haslinda there has been some easing. The market was looking for it and its elusive. You talk about the yield. Given those circumstances, where are you headed . Amy substantially lower. When you think about the recovery that you have had in the chinese recovery, sure you have had heavy industries get back. There was a degree being thrown at the problem, but ultimately, what do policymakers want . They want to support the private sector of the economy. They want to support small and micro companies because they are the employers for the company. In order to do that, they have to make sure that it remains easy. They are all benchmarks off of ccp cjb yields rising relentlessly for another 32 or 50 basis points without being damaged against what the policymakers are doing to support the economy. Yvonne havens are selling off, equities are just a bound. Despite the technicals, despite the high valuation, markets continue to edge higher. Backo you get investors into the market and how do you allocate given this type of backdrop . Amy it is a tricky question to navigate. The extent of it has surprised a lot of people. Consensus is still not reached the right letter of the alphabet on the shape of the economic recovery, the vshaped is very visible. The one thing i would highlight is that there is a degree of connection between the markets and economy. That connection is breaking when you look at the competition of major equity indices and what drives the economy. If we look at the u. S. , the s p 500 is driven by tech, health care and consumer staples. They have all held up relatively well because of the nature of the crisis. The real economy is driven by finance services, or have been hit, and hit really hard. It still continues to see slow passing recovery in the coming months. I would say that the volatility will stay for a while. Focusing on quality rather than changing the momentum will be key in the mediumterm for your investment horizon. Thank you, have a great weekend. The portfolio manager. Actions have big business to take on even more debt. We will here from the guggenheim cio, next. This is bloomberg. Yvonne guggenheim cio says they are on the credit market. They will still have to face their day of reckoning. We were already at record levels of debt on a number of measures from corporations when we got into january of this year. Was thatf my concerns one we have an economic downturn, this highly leveled economy of ours was going to lead to more severe pressures on the economy than we would normally have. And now, the Federal Reserve has basically eliminated the downside in corporate debt. Signal,t the world a and now we are putting on records amounts record amounts of corporate debt. The leverage situation is even getting more exacerbated. Toimately, the fed is going find itself in a position where when it tries to phase out these programs of support for corporate debt, it will be a lot like what happened back in 2013 when ben bernanke first talked about ending quantitative easing, there was a tantrum. Its quite likely that the fed will face that day of reckoning when it tries to slow down asset purchases of corporate debt, and the market will then challenge the fed to find out where the put is, and i think this is not a permanent feature of the market. He has told bloomberg he believes they are flirting with moral hazard. What does that mean in terms of how Companies May look coming out of this crisis . Help us understand what is at stake here. I would quote milton friedman, who once said that nothing is so permanent as a temporary Government Program. Corporate america is going to become addicted to the fed providing support. What i think it means is that corporations will take greater risks. That if you dont have a highly level Balance Sheet relative to your competitives, your equity returns will be punished for a business expansion. To pressures will be on ceos continue to increase the amount of leverage, especially when the fed has a policy of maintaining low rates for an extended period of time. I think that, ultimately, is there a day of reckoning . Reserve willederal be faced with the challenge of whether they allowed a day of reckoning, or whether they basically decide that they just have to continue to provide the quiddity to the system until inflation rates pick up to levels that probably would be viewed as an acceptable by most participants of the fed today. We have seen records amounts of borrowing from corporations. But at the scene time, you look at downgrades and its same time, you look at downgrades and its at the same pace. This was something we expected. We expected to see downgrades among high yields and triple b issuers into the highyield category for about 1 trillion in a slowdown. We are on pace to do that. We caught up today at the s p theerence, which is that rating of a bond reflects the probability of default. So when you have a Government Program that provides liquidity, you have taken away one of the major causes of sources, which is the inability to roll your debt maturities up. You have to think that, at some point, the rating agencies are going to start factoring in the implicit support of the Federal Reserve, and its going to actually, in the longer run reduce that. Save hundreds on your wireless bill without even leaving your house. Just keep your phone and switch to Xfinity Mobile. You can get it by ordering a free sim card online. Once you activate, youll only have to pay for the data you need starting at just 15 a month. There are no term contracts, no activation fees, and no credit check on the first two lines. Get a 50 prepaid card when you switch. Its the most reliable wireless network. And it could save you hundreds. Xfinity mobile. Haslinda 11 30 in singapore. We are in the middle of the trading day. They arehe party, but finally in bull market territory at 31 . Posted by assets deflecting the virus curve. For more jobcing losses in the next six months to a year amid the pandemic. One of the top political leaders here saying its an urgent challenge. It may create about 100,000 jobs, but thats not enough. By 12 months we could see more job losses and cautioning rate at 10 bless and 20 , which is what you are seeing in some parts of the world. Singapore has its jobless rate at 2. 4 . Yvonne lets get to the first word headlines. China said 10 Million People in the city of wuhan were tested. Beijing does not count the cases as confirmed, but still requires people to selfisolate. Well have where the virus was first reported, and the city surrounding the province has suffered the vast majority of fatalities in china. Indonesias growth may be less than estimates. The fiscal deficit will continue to widen as the coronavirus drags on. The deficit will extend to more than 6 of the gdp. Far exceeding the governments original target of 3 . She says she hopes the economy will achieve some growth this year. Indias Financial Capital escaped with only superficial damage from a rare tropical storm. Coast southoss the of mumbai. Torrential rains and winds gusting to 120 kilometers per hour. They were to reopened later wednesday after a twomonth virus lockdown. The Stock Exchange is expected to work later, although the Mumbai Airport was briefly shut. The former leader says there is ifigh chance of elections the country continues in turmoil. Saying months of disruption fettered the designation and are hampering economic recovery of the coronavirus, and the political drama. They remain a lawmaker despite being on trier over the 1mdb scandal. Haslinda lets take a look at where markets are right now. Up to eight days of gains. It seems like a stock market is taking a breather. Valuations looking rich. Asian stocks at 10 years high versus the earnings. Down to pacific index 10th of 1 . Nifty futures also into a lower open down by half a percent. Nifty going gang busters. We had the easing of the lockdown driving sentiment. There were at threemonth high. On the year, lagging behind the msci asia index. Looking like this, 39, down by almost 2 . Running out of steam. Falling from three months. The focus remains on the opecplus meeting, which is expected to extend its output cuts. Saudi arabia and russia could come to some kind of preliminary agreement that the pens on the other members that depends on the other members making those cuts. As you mentioned, oil retreating from that threemonth high. It is being threatened by money fueled over compliance when it comes to production cutbacks. U. S. Data is on recovery. Lets bring in the Energy Services director, joining us with more. Thanks for joining us. A stunning rally we have seen. ,or brent we touched briefly basically we have come back from 17 just a month ago. How far can we going this crew rally and is there more upside . I would expect more optimism. I think the 40 was shortlived. A lot of the momentum behind that was based on the signals we are receiving about the meeting, which is supposed to be held in june. The whole idea was, what would cuts, what they extend that further, and there seems to be this between the saudis and the russians, that they would extend that an advance it from the ninth to the fourth. To get everybody to talk about it, we could send a signal to the customers. We are doing to move forward. But suddenly we had this abrupt thing yesterday for the advancement is called often it will be postponed and rescheduled for later. And suddenly the focus is on these outliers. Kazakhstan and nigeria who have nothing carrier and their week. Carrying their weight. You can see much more intense competition between opecplus members per market shares. There will be lower tolerance of. Ountries like nigeria and iraq what does the market need to hear from opecplus . Is it what the saudis are proposing where we need to extend those for up to three months, or do the russians have a point that, as the economies reopen, demand is picking up again, maybe we just need to extend for one month . Russians are demanding a bill. The chinese are here and have been doing these things at low prices. Cargo priced off the benchmark. They are in transit now to china. Ok, we can probably taper off. , the saudir side would like to expend the cuts to the end of the year. Do, that must needs to they did not do in march, march fell apart. Now there has to be a stronger sense of compromise. I think at the very minimum, that compromise has to be the cuts Going Forward, for at least three months. The latest is one month. That is underwhelming. At the same time its understandable and they need to crack down on some of the outliers who are wall producing. But you have to see a these two or three months of an opec accord. You cannot have these agendas and the russians get excited about prompt of physical demand. Dont get too excited and dont jump the gun. Let them extend this thing for at least three months. How much of shale production is that, given that Royal Dutch Oil is above 30 a barrel, and how will this play out in terms of supply . With the u. S. Has gone exporter. The did a day, precovid prevention, and that has dropped after medically. I think the Energy Information to 11. 2ration curbed it Million Barrels a day. That is a drop off of almost 2 Million Barrels a day. That has been driven by the produces that this from wearing out. Get 35, 40could and it would provide show producers to relaunch collections and the headlines, and those producers will restart. Think that will be rather marginal. Players,ok at the big chevrons, they already have their budgets. They predict there protect their dividend. They are exercising more in the case of chevron with their stock. The cuts are not going to be undone. Those are with us. I expect to see continued drop off in other nonopec countries. Also massive cuts this morning. Producers, i show dont think it will magically restore production and think its Going Forward until the end and it will level off even more. Haslinda john, thank you. J pee dee energy director. Holderenced the current of the job who has publicly opposed using active duty forces to confront protesters in the u. S. He spoke to bloomberg earlier. Frown at our chief of staff and our cia director and secretary of defense. A crisis, and when facing a series of crisis, as we are now, the best approach is to gather the National SecurityCouncil Together and to determine what the best strategy is to deal with each of these crises. And to develop options, obviously to present the president. Develop at least a common strategy that everybody can support, and that is in the best interest of the country in terms of dealing with that crisis. So, i think this is the moment when the president needs to listen to the advice of his most experienced advisors. That is critically important at a time when you are facing this kind of serious threat to the country. We heard from one senior, but it was public, it was not behind closed doors. Is there any doubt that the president has the at dority has the authority to send in federal troops if he wants to . He could insert the thisrection act, but country has recognized that the purpose of our military is to be trained to confront foreign not to bes in combat, used for riot control or Law Enforcement. The 1800sas passed in for the purpose of making clear that the u. S. Military will not take the place of Law Enforcement. Reason, i commend the secretary of defense, esper, for taking the position that he took, because military leaders, almost in unison, do not believe that our military ought to be fight our own people, it ought to be used to fight foreign enemies. Our federal troops even trained to do this . Are they trained to deal with crowd control . We have seen some military people were not properly trained and we had tragic results, such as kent state. The federal troops, or some of the federal truth troops trained to be effective, is this the best will in the toolkit . Leon i dont believe it is. We train our military to engage in combat with a foreign adversary. That is what they are trained to do. They are not trained on riots or to crowd control or on Law Enforcement. In this country we believe that lawenforcement ought to be left to the states and local communities and that, if necessary, the National Guard can support those efforts. They do get some training in that arena. The u. S. Military forces are trained primarily seeing gauge in combat with an adversary, not to fight their own people. At the same time, we have a difficult problem. We have i think the vast majority of protesters who are peaceful are exercising their First Amendment rights. Are clearly some bad actors in some of these demonstrations who are prone to violence and our training instigate. Put aside the federal military as a tool, what is the best way for the federal government to sort those two things out so we maintain law and order, we protect people and property and also preserve the right to those who want to peacefully protest that horrific instance out in minneapolis . Leon i think it would be preferable, rather than the press asserting that sometime somehow they will take control of the situation. I think the president ought to be offering lawenforcement assistance to states and local communities so that they can in fact determine whether or not there are criminal elements that are trying to take advantage of these protests. That is a lawenforcement issue. That is an fbi issue. That is an intelligence issue. Frankly, the federal government gets intelligence on those that are trying to conduct those kinds of criminal activity. So, that ought to be shared with state and local Law Enforcement so that they can play the primary role in trying to maintain order in their communities and in their states. Yvonne that was the former defense secretary leon panetta. Live pictures happening in hong kong. The Legislative Council has begun voting on this National Anthem bill. The highly controversial one. We have seen prodemocracy lawmakers tried to filibuster and stall this legislator from going through, but largely expected to pass here today. All ofse we are watching those results, and this bill, if its approved, would criminalize anyone that does insult the National Anthem, and likely is going to stoke some anger among the prodemocracy camp. Of course, the National Security legislation was voted and passed earlier. We will bring you the latest ones we can get those results coming through. This is bloomberg. In years markets have just open. Lets cross to mumbai. Escape with minimum damage on the cyclone. How is the situation looking . They are thinking their lucky stars that we had minimum damage. It is for the city for too many basic reasons. The 200,000 coronavirus cases in india are in mumbai. They are citing effort to front. They had the cyclone and storms that are not really common to this part of the city. Be in no experience to crisis. As of now, the situation is pretty much under control. We escape political damages. Good news there. Tell a little more about the markets. It could client to a threemonth high on wednesday. What do you think is supporting businesses, even when the economy is slowing, and we just got that downgrade from moodys . Marketsderstand that are forwardlooking indicators. The sheer reason why the enthusiasm is still there is because the economy is reopening after almost two months of a stayathome order. We are picking up the pieces later when countries would come out with their outlook and how they were facing a crisis. Hope that the of reopening of the economy would this isusiness cycle very much factored in. People expect this would come because it would explain covid in the economy. Our equities reporter in mumbai on what to expect a day in the mumbai session. We are watching singapore and china. They agreed to a fast lane for essential and Business Travelers as they look to revive economic activity. This is bloomberg. Haslinda singapore and china are creating a fast lane to allow business and essential travel in an effort to revive economic activity. Lets get more to our reporter juliette saly. Tell us how this will work, and whether quarantine restrictions will be eased. Tte this will of i between singapore and provinces. The fast lane will start from the eighth of june, with travelers requiring permission from their countries. The current quarantine restrictions are tough and they will be eased, but there will be safeguards that remain in place. All travelers have to undergoing within 19 covid19 48 hours and show that negative result, then another test at arrival at their own cause. They must remain in isolation for one or two days until that test result is known, then speak then stick to their. Redeclared itinerary any inbound travelers must also get a Contact Tracing app throughout their entire state. While travelers going from singapore to china will only be allowed to travel out why bills six fast lane regions after staying in those regions for 14 days. Voide also hearing them most public transit. These outlines have been laid out by the trade minister, saying, Business Travel must be conducted in a progressive way to Balance Health and economic consideration. It comes after beijing has been pressing many countries for reciprocal travel as we see coronavirus cases. Out ofre 13,000 cases the 36,000 confirmed cases here in singapore. So we are seeing easier travel with singapore and china. As the governor likely to open its doors to other countries . Uliette there has been speculation that singapore would open its borders to other countries that have the virus under control. We heard from the Foreign Affairs governors saying singapore is discussing similar arrangements. The task force minister said that the travel bubbles would likely include countries like malaysia, new zealand and south korea, but all sides have to agree on a green lane protocol. I talkedimilar to what about before, and also Contact Tracing mechanisms. The minister says a lot of discussions are happening at a bilateral level. They hope it will be in that concept. It will be a big boost to domestic growth in singapore. We know in the first quarter, singapores gdp contracted quite a bit on their list as estimated. But stocks said the Second Quarter is likely to show a deconstruction. If we start to see be safe travel bubbles, there will be a big boost to the economy, which is a reopening after that twomonth lockdown. Juliette saly in singapore. Lets do a quick check of the latest business flash headlines. Snapchats parents is no longer promoting President Trumps messages in the news feed. Will no longer amplify voices who incite racial violence and injustice. The president snapchat account remains open, but it will affect his reach. Is trying tochat rig the election. Amazon is being sued by a group of warehouse employees who say working conditions put them at risk from the coronavirus. One worker contracted the infection at a Distribution Center in new york, where staff and encouraged to work prevented from adequately sanitizing. Amazon denies the claim and says the protesters processors have been updated. All the global ride pilling businesses are down from 70 . There was a low point in the height of the coronavirus. Per says any coronavirus uber says, any coronavirus will be offset. The decline in rides business has been offset by food delivery, which has more than doubled during the pandemic and is still exhilarating. Ecb is the next big one we are watching out for. The markets are watching what Christine Lagarde will do after the meeting. The expectation is, they will have to do something. Increase that 750 billion Euro Pandemic Emergency Purchase Program. We have seen the amount of stimulus that has called these bond markets in the euro area since the shock that we saw back in march. Any stimulust of calls, i think it is going to disappoint. Some say the markets will be priced at 500 billion in this program in the near term. The biggest culprit that perhaps sees the most pain is going to be italian bonds. Of course, that euro rally could. E good as well haslinda there are calls for the ecb to be bold. We will have more on the ecb decision later when we speak to the management president at 7 30 a. M. U. K. Time, 2 30 in hong kong. That is it from Bloomberg Markets asia. Bloomberg daybreak europe middle east is next. This is bloomberg. The following is a paid program. The opinions and views expressed do not reflect bloomberg lp its affiliates or employees. The following is a paid presentation brought to you by rare collectibles tv. The California Gold rush is considered one of the most impactful events to affect the economy during its first 100 years. It has had a long impression in numismatic history. The people of california needed a way to standardize the value of gold, so they set up assayers offices who value the