Dollar is mostly higher against some of these currencies. The kiwi and the aussie which were the early outperformers seem to be also moving some ground. The aussie certainly has had a relentless rally. Take a look at what has been driving the sentiment here today. The likes of oil. After six straight weeks of gains, this rally seems to be taking a bit of a pause. You take a look at brent, still hovering around 42, 41. New york crude around 39. 52. We are watching the likes of the u. S. Tenyear. We have surged to a high on the jobs report for friday. We are backing off from the fed when they take the stage later this week. The yield curve is one of the steepest in three years. Expect it to steepen further from here. Chinas trade surplus surged to a record in may as exports fell left and inspected. Helped by an increase in medical related sales per lets get more on this story from selina wang in beijing. What is the context between the trade surplus . The numbers were much better than the projection showing the economy is continuing that slow recovery. Exports falling less than expected. In may. Trade surplus when it comes to the exports as you mentioned, they were really bolstered by increasing sales of medical supplies and masks as people continue to battle the pandemic. Even though volumes increased, we saw the slump because of lower commodity prices. According to the Customs Bureau in china, the average price of 2 crude oil fell the first five months of the year, even though volume slowed to 5. 2 . But we have rising risks to the trade outlets, given the u. S. China to page engines trade tensions. To wrap uping spending to support the economy. What challenges to the stimulus efforts face at this point . Selina the biggest challenge here is chinas massive budget hole. The government expects the government to shrink in 2020 with revenue overall expected to drop this year, which is the first decline in at least two decades. On top of that you have this decline of revenue being compounded by the pandemic. Including profits from state owned enterprises. Are usually used to pay for spending including social security, education, health. China has used land scales for Infrastructure Projects to generate Economic Growth. We are also seeing pressure on land sales. Enouygh, far enough, they will pare back spending. They can use other revenue to make up the gap. Now the shortfall is great enough it will still but pressure on spending. Out with china is due inflation and credit data later this week. What are we expecting . Selina when it comes to the inflation data, on Consumer Price inflation, bloomberg expects it to have rose 2. 8 in may, slower than in april. Due to pork and gasoline prices. When it comes to factory pressers prices, bloomberg expects a drop of 3. 3 . Trend drivenation by weaker demand, lower commodity prices. Its expected to persist, given the cost of recovery in the rest of the world. When you look at aggregate social financing, our Bloomberg Economics expects that to increase by 3. 5 trillion yen in may, even more than april expectations, which is far what economists projected. This reflects efforts to ease Credit Conditions and monetary measures, try to stabilize the economy with an increase of the deficit. Yvonne that was selina wang with what to expect out of some of the chinese data due later this week. Lets get to first word news. Worldwide deaths from coronavirus have now topped 400,000 with infection numbers approaching 7 million. This comes as china rejects renewed accusations it withheld data about covid19, saying it has always been transparent and informed the outside world about the of elements in a timely manner. A rise of 1 to just under 2 million cases in the u. S. Japan contracted less than estimated last quarter after stronger capital investment, even as it sinks into recession. The updated report shows gdp shrank an annualized 2. 2 compared to the end of 2019, less worse than the initial 3. 4 estimate. Japan still has contracted for two straight quarters with an even sharper drop expected in the current period. Minneapolis says it is beginning the process of dismantling his police force in the aftermath of the death of george floyd. A majority vote is vetoproof and the City Council Members say they will consult the community on what should happen next. Saturday, the mayor was booed by protesters by saying he did not support the abolition of the police. He was elected in 2018 after promising to mend relations. Opec and its allies agreed to a onemonth expansion of production curves while calling on members to stick to agreed levels amid allegations of cheating. The deal could see brent climbing to 50, and seen as a win for saudi arabia and russia. The opecplus Monitoring Committees will also meet every month to assess demand. Bocom international discusses the prospect for chinas Aviation Market and tells us what the rest of the world could learn as beijing allows more international flights. Mitsubishi gives us its outlook for action as the latest data from china and the u. S. Is not as bad as expected for the Global Economy. This is bloomberg. This is bloomberg. Chinas currency has moved away from testing its 2008 lows against the dollar but that has not stopped the yen from weakening. Renminbi has fallen for 15 Straight Days against a basket of currencies. It is supposed to be erasing its gains against both Exchange Rates this year. Lets get more now from cliff tan, cliff, tell us more. Weve seen the renminbi down more than 4 against the euro and the aussie. Is the direction more clear now . How are you revising your forecast . Cliff its still not vlear. Clear. Obviously with his big jobs number, people are wondering if there will be a riskon phase going forward. Our view on the Bilateral Exchange rate is they should be cautious to keep it above seven. Because they are not sure about the strength of the recovery in the rest of the year. Basket, we actually viewed it as a little bit of a thetion to trump, and threatened reprisals due to hong kongs National Security law. So we thought when the phase one deal was signed that there might unyield Side Agreement that china would try to push the basket back up to Something Like 93 and change. Changenow back to 91 and , and that rather noticeable weakening might have been a little bit of a reaction to trump stoking the trade fires again. That is the way we have been interpreting it. So you are looking at this whole reflation theme, do you think the dollar then is the most valuable gauge of this vshaped recovery, and do you buy it . The dollar, i mean is a reliable gauge, but it is in a direction of weakness. The dollar weakens when it is safe to do so. So when there is prospects of a stronger recovery, the dollar can weaken a bit because it will lose some safe haven status. Obviously the jobs number was a huge surprise for most of the industry. I do have to admit that economists have a tendency to not see what is staring us in the face. I think the way to interpret the jobs number is that it is telling us that the gradient of the recovery in the Third Quarter will be a little bit faster than what we expected. Even though that initial we are in a deep hole here. Even with some kind of a noticeable balance in the Third Quarter, we are still going to be way underwater as far as the World Economy is concerned. When it comes to dollar yuan, with rising tensions within the u. S. And china, could the market drive the yuan much weaker than what the pboc is comfortable with . Some numbers are suggesting youaps 7. 20 is a level could be watching. Ourf we have got 7. 20 in forecast for later this year. If the economy improves a little bit faster, we are actually going to head in the other direction. Question, the earlier about the jobs number, i would have to say that if you look at all of the data for the u. S. And also for other globally important economies, the pattern is not in keeping with the strength of that 2. 5 million jobs. We are improving. Thise approving along elongated curve we expected. I still think that is the conclusion. In the shortterm, the next two weeks, we have to be very vigilant that we are not missing something that is obviously staring us in the face. Haslinda that is the jobs data in the u. S. How about trade data out of china which we saw just yesterday . Missed show perhaps we external demand and china needs additional stimulus when it comes to fiscal and monetary. How do you see policymakers responding . Cliff well, i mean i think the trade numbers, as you know, was greatly influenced by the sale of medical quitman from china. I read interesting anecdotes the last few weeks about how much work it took to work out all the logistical kinks to get that medical supply out of china and to all places like the u. S. , for example. As we go into the Third Quarter, if the world is unlocked and starts coming out of the deep recession, we should see the medical supply numbers drop and replaced by normal exports. That is something to be watching for. I think that the domestic demand side of chinas economy is still under question. Because what you mentioned just now, the countercyclical stimulus, my question would be how much more can china do. You mentioned a little while ago about the credit number. The credit numbers are gargantuan. They are throwing everything they can at the wall to see what will stick. Early on you mentioned about Bloomberg Economics mentioned something about limitations to fiscal stimulus. This morning the idea that demand might look a little better for china, theres still question about domestic demand. Yvonne that is how we are seeing the chinese yield curve actually flatten against what we are seeing in other benchmarks as well. Report about the retaliatory measures weve got from the white house on hong kong. Some would say we are mild at best. Do you think investors should look at this as a meaningful exhalation escalation . How are you reading chinas move . Cliff with the u. S. President , its kind of an obvious statement, but since he made that rose garden statement about hong kong, i mean, he has been completely absorbed by the u. S. Protests. Think he hasnot had a lot of time to consider the options in front of him. Were stills looking for further measures to be announced in conjunction with hong kong, particularly before the september elections in hong kong. Meane so what would that for, i guess, the broader theme of u. S. And chinas trade relation . Do you think the hong kong story becomes more of a prominent issue between the two sides . Cliff the hong kong story is the catalyst. It catalyzed a lot of antichina sentiment in the u. S. , but also in other countries. Its becoming like a larger ball. I think one of the things that will be surprising to some observers in asia, is lets say trump loses the election, i think initially the markets will think all of this will go away. I think what will be surprisings how much of this sticks, or how much of it persists. Even for example under a democratic administration. Moreou know, weve got jousting, possibly even more conflict ahead of us over the next two to three years. Its a very different world than what i have grown up with most of my life. We are looking at cooperation, globalization. That story has really shifted quite a bit. Haslinda cliff tan, thank you so much for your insight. Coming up, curves in oil production. Tocs attention now turns compliance as it looks to make sure members are sticking to their word. Details, just ahead. This is bloomberg. Is is bloomberg. Oil prices are fluctuating between gains and losses after the extension to opecplus output curve with brent above 43. The expansion is seen as a victory for saudi arabia and russia, which were in a brutal price were just too much ago. Just two months ago. Stephen, what is different about this opecplus deal . Stephen this has an interesting aspect of it that has been talked about for decades since opec came together. That is in addition to the onemonth cut, 9. 6 Million Barrels a day, they will also have a new rule that says if you do not cut what you promised in may and june, you have to make those extra reductions for july and september to basically compensate. This is directly calling out folks like iraq, kazakhstan, nigeria, which were not exactly squeezing supply nearly as much as they had promised, while russia and saudi arabia had been cutting at record levels. So, this is going to help sort of bring in the opec production, and in a way, will likely be able to balance the market faster than what somewhere originally expecting. Some were originally expecting. Yvonne apart from the compliance front, they are trying to boost market prices. How so . Stephen saudi arabia every month puts out their pricing scheme for the next month. They put out yesterday, sunday that showed prices at a much higher level. Saudi arabia made some of the biggest price increases for its oil in at least two decades for july exports. The biggest jump was a lie exports to asia was july exports to asia. This came after they made in numerous discounts in march when they started the trade war with russia. With saudi arabia boosting their prices, theres expectation this will feed into the physical market and you can see brent and wti prices also get a boost from this jump. Keep thisanything to rally going it seems. Lets get you the latest business flash headlines. Said to be is interested in a merger with american rival gilead. Sources tell us formal informal contact has been made and what would be the Biggest Health care deal in history. No terms have been released or decisions have been taken. They are valued at 140 billion dollars with gilead under 100 million. Gilead is not interested in a sale or a merger. Singapore airlines has secured the equivalent of just over 7 billion u. S. In fresh liquidy as it looks to ride out the coronavirus panic. Just over 6 billion of that was secured in a rights issue last friday. Lines have been renewed at least another half year and another half billion dollars is being raised in a shortterm unsecured loan with several banks. Semiconductors reported to have one extra order with production lines remaining fully loaded through the end of the year. The orders come from apple, qualcomm, amd and others, and will help make up for declining chip demand from huaweis high Silicon Technology amid pressure from the u. S. Asian markets are off to the races, set for the longest winning streak in 60 months. We had betterthanexpected 16 months. We had better than expected numbers pointing to a Global Economy that is less bad. The focus this week is on the fed policy reassuring investors to keep neat keep rates near zero. Gainon soems continue to with biggest gains in eight years. In flight volatility dropped the most in nine years. Investors continue to shrug off u. S. China tensions and protests in the u. S. Swinging between gains and losses. We had opec expending extending its cut. Decline in chinas exports may suggest weakness in demand. Nikkei 225 up. 9 , off the 6th consecutive session. Hang seng getting a boost from the ipo adrenaline. Adding a lot of it liquidity. One of the last few ones to get into positive, or bull market territory, currently up by more than 27. 80. Airlines we are watching. We are keeping watch among the four chinese carriers. The Trump Administration revising its chinese flight restrictions. Authorities will provide more than 800 million in liquidity. T, we will look at this is bloomberg. When you say what youre in the mood for, the xfinity voice remote will find exactly that. Happy stuff. The groups happy, im happy. You can even say a famous movie quote and it will know the right movie. Circle of trust, greg. Relax, the needles are jumping. You can learn something new any time. Education. And if youre not sure what youre looking for, say. Surprise me. Just ask what can i say to find more of what you love with the xinity voice remote. 10 29 p. M. In new york. Here are first word headlines. Outbound shipments fell less than expected. 3. 3 in dollar terms from a year earlier. This after a trade surplus of almost 63 billion helped by the following price quantities. Simmering with australia is deepening. Culture onceof chinese travelers to be not going to australia. They called for an investigation into the origins of the coronavirus and beijings decision to put tariffs on imported australian goods. New york city has lifted its protest curfew as it prepares to reopen for business. Governor andrew cuomo says covid19 is the number one variable for the city and is calling on all protesters to seek health checks. This week and saw some of the biggest black lives matter demonstrations across the u. S. Most of them were peaceful. Is investigating a Massive Oil Spill in siberia. An estimated 20,000 tons of fuel oil leak from a storage site. About 1800 kilometers northeast of moscow. By alant is operated company accused of making the area one of the most polluted places in the earth. Yvonne lets do a quick check on markets right now. This global rally is still gaining a little bit of steam. Sessionthe highs of the on asian stocks. We are inching closer to 25,000. The kospi now close to regaining all of the losses this year. Joining the likes of the nikkei, the malaysia benchmark. We are looking at u. S. Futures. How are we going to fair and the mumbai session . Your singapore futures. We are losing that momentum for another eighth day. We are seeing some of these trade dependent currencies. Haslinda Global Airlines are slowly increasing capacity. But some say things will not be the same. Returning tot be the opening connect the Global Economy we had before. Movements of people will be more restricted. International travel will be much less frequent. It will no longer be easy to take weekend trips to hancock arbaugh hong kong bangkok or hong kong. Haslinda china is easing its ban on foreign airlines. A changemay open up for u. S. Carriers to return for the first time in four months. Good to have you with us. How significant is this easing . Right now, it seems like this is a shortterm ceasefire. We do believe this latest policy brings open a path for u. S. Airlines to return to china. However, we have seen a lot of tension over flights over the past few years. We know this aviation flight, there is still room for escalation. Haslinda having said that, the u. S. Ban, how will that impact the likes of air china and others . We know they have limited. Xposure to the u. S. This does not affect their earnings much at all. We were looking at the trade war tensions over the past few years. Now when it comes to area carriers who can fly through, in the grand scheme of things, these airlines have already massively reduced their reliance. In the shortterm, effects on earnings will be great at all. I want to bring up a how in terms of passenger traffic in china, those volumes have actually bounced back and doubled since the bottom. Are you seeing that it really is contingent on restrictions . While week to see signs of pretty substantial amounts of that foremand, we know 2021, traffic will be contingent on if the government allows the slight to resumes. Flights to resume. If people are looking at pentup demand as a potential driver, they may be a little bit disappointed. Yvonne which Chinese Airlines of the ones you cover could gain the most on what is looking to be a pretty nascent recovery so far . Do preferow we basically all three of the major airlines. We think they have the potential to gain more market share. We know a lot of their foreign competitors are not in a very good shape to increase the market share. We think that potentially in the near term, they have more to gain because they are in better shape right now. Until the market bounces back. We heard from the Prime Minister singh travel will not be the same post covid. For instance, short trips to the like of bangkok from singapore will have to wait much longer. What do you make of that statement and what key trends easy developing . In the long term, we do not see air travel shifting by much. But we know we could see some differences. These Smaller Airlines will likely go out of business. Ticket prices will go up. We knowcomes to access, the regional markets, airlines will see a lot more by adding new routes. Travelers of the day, will have fewer options, higher it will likely be a lot higher. Singapore is trying to create these travel bubbles. Countries are coming up with Bilateral Agreements for travel. I feel like you still have a neutral rating when it comes to cathay pacific. His hong kong at a big dissident is for not doing this . Unfortunately, hong kong is such a massive global hub that for them to rely on this is difficult. We know their excuse exposure to the markets is huge. This will not be enough to boost their revenue back to where it was. Hong kong is globally exposed. If there is still covid active anywhere in the world, hong kong will be affected. We will leave it there. Thank you. The Minneapolis City Council pledges to begin the process of abolishing its police force. We will have the latest on the protest in the u. S. Next. This is bloomberg. Yvonne the city council and minneapolis will begin the process of dismantling its Police Boards after the death of george floyd sparked a wave of anger and protest. Rallies continue across the u. S. And the world. Andes have lifted curfews President Trump as order the National Guard out of washington. We have the latest. This is some kind of change. How will they replace the police force . It is quite a big change. This is very early. Some big cities looking at doing this. Some big cities spend up to one third or half of their budget for Public Safety salaries. Question about is that the best way to go . Optimistic scenario around this says, to you want to send the cops for everything you send the cops for . Or would it be better to send someone else, may be a social worker or Mental Health worker depending on what ever situation it is . In practice, this is a very difficult thing to do. You have seen new york and los angeles say maybe we will devote a little bit less money. Minneapolis is going farther than anyone else. There is a long way to go. They do not have a plan set out yet. They have the votes to try to do something but it is not clear what something is. Based on some reporters that i know, there is the possibility that the entire city may have to vote on it before becomes law. Former secretary of state colin powell was the latest republican to criticize President Trump. Are we looking at a deepening fallout . Yes. Will see one of the biggest encapsulations of where we are. Joe biden will go to houston. With George Floyds family. At the same time, donald trump will be meeting at the white with a panel with law enforcement. He has been sticking toward that side of the equation. Bit bigll be a visual from the key candidates on where their priorities are. How they are aligning and how they are messaging going forward. Still to come, europes Metal Exchange faces an uncertain future. We will hear exclusively from the ceo, next. This is bloomberg. Nys you opened its Trading Floor last week. Exchange isetal less certain. We spoke to him. It was europes last Traditional Exchange floor, and tilt the coronavirus swept the globe. Closed and moved to electronic pricing. It was founded in the 19th century. Will it be able to reopen after the pandemic . The ceo hopes to bring this back. If we did reopen, we would be asking our staff to go back to the ring environment. Clearly we are waiting for the government guidance. Even if the country can open up restaurants, you can run restaurants and a socially distance way. We dont know how you run the ring in a socially difference distanced way. The most prudent thing to do would be to keep it closed. Has gone smoothly . Could it increase trading . In a narrow sense, absolutely. We are confident that our market is orderly. I have not heard a single complaint. In that narrow sense, we are very confident in electronic pricing working. The broader discussion is about what drives more activity. You can have a market that works absolutely fine for getting your core business done. Not drives it does the same peripheral business. Just because electronic is working does not mean it is terribly better. Lets remember, the ring has been working for over 100 years. You were talking about the 100 years you have been trading for. On more the big picture level, what would it mean to close the last open outcry Trading Floor. I think there is a very significant emotional element to it. It is a very visible sign of the service we provide. People want to come and visit us. Of thatch a symbol trading activity. That if we ever did lose the floor permanently, which i am not anticipating, it would be a hugely sad moment in an emotional perspective. Symbol of howreat things work. Yvonne that was the ceo of the london metals exchange. The anticipated winding down of prompting as is recovery at sites like airbnb. They say the gradual easing of restrictions has led to an increase in vacation rentals. But theynt to get away are not keen yet on taking a plane. We are told this deal will cover ipads, macs, monitors over a 12 month. The hong kong Stock Offering is at this. When it begins trading on thursday. The Gaming Company has listed in the u. S. Washington has threatened to limit access to capital markets. South korean financial authorities will provide one thelion yuan to keep carrier operational during the coronavirus. Government bonds will be issued as early as the end of this month. Funds help to keep the carrier afloat for the rest the year. British airways is threatening to fire its pilots and rehire them on individual contracts. There is a dispute over employment terms. The carrier has also begun a legal fight. Would force ae plan to revisit services in july. Asian markets continue to rise higher. We have asia set for the longest winning streak. There is a lot of optimism out there. This came in better than expected. Global economya that is perhaps recovering. Focus this week is jay powell. Reinsure investors. All of this is grinding higher. This comes from their biggest gains and more than eight years. They will continue to struggle off u. S. China tensions. Looking at the key benchmarks in asia. A lot of policymakers in china will support the fiscal stimulus. Hung hong kong affecting the policy. Economy directing lovers last quarter. Even as the virus pushed japan into a recession. The hang seng is also being lifted like the rest of the region. China,d for mainland getting a boost from those ipos. Here we have the airlines. To gosouthern continues higher, up by almost 5 . The Trump Administration revising its china flight restrictions, including two flights a week. That would cut by half the number of flights to and from the u. S. By the four chinese carriers. Korean air up by almost 1 . Reporting authorities will provide more than 8 million in liquidity by issuing government bonds as early as this month. If you want to play this whole scheme, i think airlines are the way to go. Given how battered these stocks have been. They have come back in a big way. Last week, another way to gauge that is one of the most valuable barometers of this recovery. We are down for an eighth day here. The longest streak since 2017. But you are seeing the strength of some of these trade reliant economies. The yuan and the taiwanese dollar stronger here. We have plenty more ahead. This is bloomberg. Haslinda it is almost 11 00 a. M. In hong kong. Welcome to Bloomberg Markets asia. Here are the top stories. Chinas trade rose to a record. Shipments fell less than expected. 23 billion. Swiftg hopes of a recovery. Oil is higher. Compliance is key. Exit from the virus lockdown. Critics say the governments plan is not working. Heres a look at what is going on market wise. Right hereest gains for asiapacific. Thatuation where we solve u. S. Jobs report come out. It stunned everyone. Modest gains across the board. Not quite as convinced as american. That it will be a vshaped economic recovery. This is where the hang seng is. Withospi has been flirting gains. The Chinese Market up by two thirds. U. S. Shares are close to wiping out their losses. Investors possibly looking at the fed policy meeting later this week. The jakarta market coming on board. 2. 2 up. No trading in australia at the moment. Thailand also in the green. We are in but not quite as much as we had been. Haslinda in the fx market, it is broad dollar weakness. That trend continues. Daydollar has slipped every for more than a week. Its longest decline in a year. The economy is recovering more than expected. The yen is looking at 109. 53. The aussie at 69. 72. Rallied as much is 27 . The greenback rising from a 18 year low. The kiwi at 65. 18. Crude up by 8 10 of 1 . Opecplus extending its steepest cuts. Saudi aramco extending its features. Gold has fallen pretty sharply. Gold may face a nearterm correction. Lets get the first word news. Worldwide deaths from the coronavirus pandemic have now passed 400,000. Infections above 7 million. China rejects accusations that it withheld details about covid19. Saying it has always been transparent. Japan contracted less than the regional estimate. Report shows strength. Compare with the end of 2019. This means japan has contracted with two straight quarters. Opec and its allies have agreed to a one month extension of reduction curbs. Allegations of cheating. They say that deal could see brent climbing to 50. It is seen as a win for saudi arabia and russia. Opecplus Monitoring Committee will meet every month to extend. Beginnings says it is the process of dismantling its police force in the aftermath of the death of george floyd. As aajority vote is seen boost to City Council Members. They are consulting on what should happen next. Rishaad that is a look at the data that comes out over the weekend. A record in may. Exports fell less than anticipated. Lets get more on this story from selina wang in beijing. Give us an idea of the context behind this. Selina the numbers were much better than expected, showing that chinas economy is continuing to slowed showed toward recovery. The trade surplus reaching a record today. Exports were bolstered by the increase of sales of medical supplies. You saw this thanks to lower commodity prices. According to the china custom bureau, this felt more than 20 . The outlook is murky, given the rising risk of u. S. Traded tensions reask elaine. Told companies to pause purchases of u. S. Farm goods. The u. S. E exports to falling 1 fall imports fell more than 13 . Haslinda what challenges does china have . Challenge isiggest that it will shrink in 2020. Thisue is expected to drop year. That will be the first decline in at least two decades. That will be compounded even more by the tax breaks to help these firms that have been hit by the coronavirus crisis. Tax revenues are usually used for general spending. Scales as ase land support for money for Infrastructure Projects. Seeing pressure on land sales revenue. If that falls, local government will have to cut spending. We have china due out with inflation and credit data later this week. What are we expecting . Selina a busy week ahead on the economic calendar. Consumer Price Inflation is expected to have voted growth in may compared to april. They are getting lower gasoline prices. When it comes to those Producer Prices, we are expecting a deeper drop of 3. 3 in the Producer Price index. With inflation being driven by weaker demand. For aggregate social financing, that may have increased by ¥3. 5 trillion in may. That would reflect authorities efforts to ease this monetary credit. Haslinda our china correspondent selena wang in beijing. More of indias leading think tanks tell us why the stimulus plans are destined to fail. Speak to the president and ceo of indias center for policy. Rishaad just ahead, our next guest gives us his take on Global Economic data that came out better than anticipated. Guidance from the Federal Reserve will be the key element to watch. This is bloomberg. Haslinda asian stocks are kicking off the week with gains after the it is u. S. Job numbers smashed expect nations. People hoping for a quick economic rebound. Lets bring in the Development Committee chair of the Investment Association of singapore. Good to have you with us. This is driven by the positive sentiment. What are the gains we are seeing . The fundamentals are still extremely weak. The data looks terrible. But the market is focusing on the Inflection Point somewhat is changing the slope. It seems to indicate that the bottom is in place in terms of the economy. That is where the markets are focused. Economic growth is still extremely weak or negative. Haslinda you talk about the slope. They have all pretty much steepened. Are we looking at higher rates from here . Meets this week. Relate rates will remain very low. Yields in the longer maturities are up. There is plenty of supply. These offer investors very little attraction. There has been very little performance at all. The role of government bonds is seriously in question for portfolio can actors. Constructors. Haslinda the fed is saying we will see that rotation. Money will slowly get into the stock market. That is the biggest conundrum for investors. We need to have some defensive assets. We have stocks still extremely risky. Coming at levels that are implying substantial growth in the economy. This makes it very difficult for investors. I would not say the automatic places to go to stocks. That will just increase the riskiness of the portfolios. Just getting some news from new zealand saying that they are going to be seeing the remover removal of social distancing requirements. Retail will be coming back without limitations. We will see further causes of covid19. That is the big fear. A second wave. That is particularly true in some countries. We have those under control. That is in the normal realm. Countries took much longer and have a much larger number of casualties. If they havee their infections under control. Becomes much more difficult to emulate what new zealand has just announced. Thatia we have countries have done remarkably well like korea, taiwan, hong kong. They have kept deaths extremely low. I wouldnt say that is more broadly in emerging markets. Rishaad what will be the next wall of worry . We could see a second wave of this pandemic. Investors likely to be concerned about . They seem to be looking like the classes three quarters full. Given where markets are right now. Absolutely. This reflects the fact that we have had no Economic Growth in the month of april. Any incremental return to work or loosening of restrictions, all of that contributes to some growth. Been this very positive view on the recovery so far. Once one gets past this initial bounce, recovery, getting back to work situation, then people will wonder whether this is very sustainable. How quickly will this come down to normal levels . Are ther worrying risks u. S. Elections coming up. Investors might focus on that. We have the u. S. China trade tensions as well. I am worried about the second wave. We see a lot of restrictions relaxed and people getting together, we have to see what will be the effects and whether countries will see an increase in infections. Rishaad we have the u. S. Elections in november. How do markets perceive a change in administrations . The other side would be looking at these. And theand washington harsh words they have had for each other as of late. Even though that rhetoric has died down somewhat. What is difficult for Equity Investors is that in the Trump Administration, it implements significant tax cuts for corporates. That led to an increase in earningspershare. And in stock prices. We saw a tremendous rally following the tax cuts. There is some serious discussion about reversing some of those tax cuts by the democrats. Generally, following the incredible spending by governments around the world on measures to attenuate the effects of the lockdowns. We will see an increase in taxation. That is inevitable. That will cost company profitability. Investors will have to start pricing that when we get closer to the u. S. Election. That will be a topic, especially if the democrats have a clean sweep. Polls are indicating that there is a demonstrate that the ocrats sweep with the senate and the presidency. What is concerning to me is that u. S. China tensions have been embroiled in the election worries. It is something that, when things get better, it will be wheeled out. It is bipartisan. They have to be cautious not to overdo it. Rishaad thank you very much. You what we have coming up on the program. Opec attention turns to compliance. It looks like members are sticking to their word. Following the mr. Pinocchio way of thinking. This is bloomberg. Rishaad we are back. Oil prices fluctuating between gains and losses to start the week. About 43 a barrel. Maintain production levels for another month . That is part of the deal of the opecplus members. They are also promising strict compliance. What does this agreement mean for the oil markets . Tell me about the pinocchio affect . Whose nose is the longest . The positive news over the weekend about the opec agreement has given fresh legs to oils rebound rally. This may have reinforced the latest list markets on economic reopening. Under the new deal, it is a much positive. Saudi arabia and russia have been on the same page to increase compliance over the entire group. Another thing is that the opecplus alliance will add 9. 6 Million Barrels a day through the end of july. Instead of 6. 7 Million Barrels a day. There will be extra reduction of about 2 Million Barrels a day. That will chip away at half of the inventory built up during the height of the Virus Outbreak this year. Some analysts see the Global Oil Market slipping to a small desa fit deficit by the end of the year. There are a lot of positives. Thei arabia has seen biggest increases for its crude in decades. Oilsan alter european recovery. We have seen a slump in u. S. Drilling. Down aboutket is 70 this year. The jobs data in the u. S. Last friday was brightening full demand. Any Downside Risks to this rally . One of the biggest threats to the rally in the price of oil is a return of u. S. Shale seen steep which has price gains recently. We are seeing early signs of some producers trying to accelerate later this year. Oil prices are still down about 40 from this years high. The intensity and degree of next round of rallies depends on how u. S. Oilhow rapidly producers will ramp up production. It is not just u. S. Producers but all of the producers who will be tempted to increase output if prices continue to increase. Finally, we have some risks and concern. Over a second wave. Rishaad thank you. This is bloomberg. City,day in the lion almost 11 30 a. M. In singapore. Asc i up by 1. 2 . It is up 25 from the bottom in march and is looking to pass its 100 day moving average. Compared to the rest of southeast asia, it is an underperforming. The benchmark up 40 . Singapore bracing for tougher days ahead. We heard from the Prime Minister cautioning about rising unemployment. He said singapores future wont look like the one before the virus. Sounds a tad ominous for my liking. Rishaad absolutely. Moving on to whats going on with the first word headlines, looking at chinas trade numbers. They had a jump in medical exports that helped out. Shipments fell less than expected, although imports did decline. Exports fell 3. 3 from a year ago, while imports slumped almost 17 . 63 billion helped by the falling price of commodities that china needs. With s simmering spat china issuing a travel warning saying discrimination against asian people is on the rise. The ministry of culture warning chinese travelers to be on the alert and not go to west leah not go to australia. It follows a call for an investigation into the origins of the coronavirus. New york city has lifted its protest curfew as the city prepares to reopen for business after the pandemic. Saidnor andrew cuomo covid19 is the number one variable for the city and is calling on protesters to seek health checks. The weekend saw some of the biggest black lives matter demonstrations across the United States, mostly peaceful. The Prime Minister of singapore saying the future will look very different post covid19. Said theyess, he would not be returning to the interconnected Global Economy before the lockdown. With unemployment rising and travel hammered, the future will be more tough. Singapore spent the equivalent of 24 of gdp on its response to the virus. The city council in minneapolis will begin the process of dismantling its police force after the death of george floyd sparked a wave of anger and protests. Antiracism rallies continue around the u. S. And around the world as cities lift curfews and President Trump orders the National Guard out of washington. Jodi schneider has the latest. How is minneapolis going to replace the police force . Jodi thats really the question. What we have heard from the city council so far is that nine of the 12 members, they support disbanding the city Police Department, which is one of the most aggressive stances we have seen in terms of policing reform. Of course, minneapolis, the city where george floyd died. There is a civil rights investigation happening. They have not yet said what they would do to replace it. We have seen this in cities before. 2012 whenw jersey, in crime was rampant disbanded its Police Department and replaced it with a new force. 2000n in california in shifted policing to los angeles county. Presumably something will come in its place, but we dont know what it is. This is a vetoproof majority on the city council. The mayor does not support it and has received criticism for not supporting it. The mayor there has run on a campaign to basically restore relations between the Police Department he is facing a lot of criticism. Theeapolis at the center of storm of controversy and now protests across the u. S. And around the world. Some protests globally over the weekend. Trumpd whats president been saying about these protests , which have been largely peaceful . Jodi they have been peaceful over the weekend. Obviously last week we saw a fair bit of unrest, a lot of looting. Over the weekend, we saw largely peaceful protests. Curfews were lifted. We have not heard much from President Trump except on twitter. On twitter, he said he is ordering the National Guard to vacate washington now that everything is under perfect control. He threatened to bring in the military last week. That didnt happen. National guard did patrol in some areas. We have not heard from the president. There is speculation maybe he will address the nation at some point, but we have not heard from him except on twitter. Rishaad former secretary of state colin powell is the latest republican to criticize President Trump. This is, perhaps, some have said, dealing a blow to his election prospects. Political fallout continues to deepen because Colin Powells words echo those of several other republicans. Jodi thats right. Some polls that have been conducted since the unrest started, since the death of george floyd, have shown the president is not holding well in some states, including states he won in 2016. Protests have become the issue in the u. S. Right now and it comes amid the coronavirus, which has now seen 110,000 deaths in the u. S. This is something that has hurt the president s election prospects. Even with some good news for him , unemployment numbers were not as bad as people expected. That is good for the market, giving a bit of a boost. Talking about where the nation has been addressed in polls. 87 said they did not like the direction the country was going. For a sitting president running for reelection, those are tough numbers. Rishaad jodi schneider, Senior International editor. Coming up, india enters the first phase of its reopening with malls, hotels, and some restaurants to resume business today. The governor has made some missteps in his virus response. Thats next. This is bloomberg. Haslinda lets do a quick check of the latest business flash headlines. Singapore airlines has secured the equivalent of just over 7 billion u. S. In fresh liquidity as it looks to write out the pandemic. Just over 6 billion of that was secured last friday. The airline says all lines of credit through 2020 have been renewed friendly have been renewed for at least another half year. Another . 5 billion has been raised from several banks. Authorities will provide 1,000,000,000,001 to provide the countrys flight carrier operational during the pandemic. Government bonds will be issued as early as the end of this month. The airline has already received a similar amount for the first half. The latest funds came to keep the carrier afloat through the rest of the year. British airways is threatening to fire all 4300 of its pilots and rehire them on individual contracts in a dispute with unions over employment terms. Ba aims to shed 12,000 jobs as it navigates the coronavirus disruption. The carrier has also began a legal flight a legal fight to stop isolation requirements on arrival. Ba says the 14 day rule would thwart plans to resume services in july. Jds hong kong Share Offering is said to be oversubscribed. Chinas second business secondbiggest online retailer is looking to raise billions of dollars from the offering. Like other Chinese Companies listed in the u. S. , jd. Com is under threat of being delisted in america. The stock started trading in hong kong on june 18 will start trading in hong kong on june 18. Rishaad hong kongs government is promoting stability for its currency, unbroken since the 1980s. That is as they try to revive a flagging economy. Bloomberg spoke to the financial secretary about when he sees a recovery. This year i think towards the second half of the year, particularly the Fourth Quarter this is helpful but this depends not just on ourselves but, number one, the coronavirus situation globally. If globally this is under control, a lot of Economic Activities could be revived. The relationship between the u. S. And china, particularly on the trade front, will affect foreign trade. At the moment when we get the coronavirus situation under control and society back to a stable environment, we are going to encourage our own consumption. 10,000 stipend for every hong kong citizen. People are still waiting for that. Coming soon. That has been a big complaint for local people. We are working very hard. Why does it take so long . In the u. S. , you pay taxes on a pay as you earn basis. We pay taxes once a year. We also have a very stringent data privacy act. The data we gather from citizens from different sources cannot be used for this. More stimulus needed, and where and how . We are working hard to roll out the stimulus package we have in the budget. Measures rollout. First quarter gdp growth was down 8. 9 yearoveryear, i think the worst on record. Is that the worst for this year . Do you have any reason you can give us that you might have to revise your fullyear forecast again . I think it is a contraction of 4 to 7 for the full year. We will be doing another update in august as part of our regular process. What are the tea leaves telling you now . It very much depends on the external virus situation and economic recovery. We suffered dearly in the first quarter, but globally i think we are in a global recession because of the virus. Are you seeing any indications of capital flight . Heracts and figures becloud figures speak louder. Ever since the announcement of the National Security loan, the hong kongu. S. Dollar has been on the strong side. When i talked to banks, the ,ealth management individuals there is no obvious outflow of capital. The local news shows signs of people a little worried. Local money exchanges running out of u. S. Dollars, or lining up to get u. S. Dollars or other currencies. That has happened in the past in times of crises. People want to get hard currencies. Is that just a temporary phenomenon right now, or is that an indication there are deeprooted concerns in society . Believe this phenomenon is a reflection of any deeprooted issues, as such. This is a shortterm anxiety and sentiment. Last year during the social turmoil, we saw a similar phenomenon. Last year when we went through those difficulties, our Financial Market had been operating very smoothly. There was no obvious capital outflow. The total deposits in the Banking System at the end of last year, compared to the beginning of last year, registered a modest 1 growth. Days, we the past 10 did not observe any obvious capital outset. That was the Hong Kong Financial secretary. Indian markets started their trading day in the last minute. Up,stors are pushing things 1. 8 at the moment. Up atg at reliant, 1. 8 the moment. Reliance industries has seen more investment into its platform, parade investors investing more money into that current investors investing more money into that. Investment does increase the platforms valuations. Thats what we have with markets. Positive start in india. This is bloomberg. Rishaad india is starting a phased lifting of his lockdown, allowing malls, restaurants, and places of worship to open now. The nation is in the top five in infection numbers. Our next guest has been critical of the governments response to the crisis. You mean eir. Lets lay out you have been most critical of in the administration. A lockdowninto fairly early in the pandemic evolution, towards the end of march with about four hours of preparation and absolutely no clarity on where the government stood in terms of the kind of economic response it would offer against the backdrop of the lockdown. What we have seen unfold in the last two to two and a half months of the lockdown has been largescale economic distress best exemplified in the fact that millions of casual and informal workers found themselves stranded and had to on many occasions make a very arduous and difficult journey home on foot, absent any food, income support, or relief measures from government. We today are in a position where we are recognizing it is economically unviable to continue with a strict lockdown. The indian lockdown was the strictest in the world. As we are opening up, we are also reaching early phases of the peaking of covid. The numbers are rising on a regular, daily basis. As a country, we still dont have enough clarity on what was achieved on the health front over these two and a half months in terms of preparedness to deal with the peak of the pandemic. Right now india is confronting both an economic crisis, for which we still are awaiting a substantial package from government, and a substantial roadmap for recovery. But also it is coinciding with the increased peaking of the covid outbreak itself, which is beginning to stress the health system, as it has done across the globe. Rishaad you are also arguing that it is not an economic crisis, per se, that it runs deeper than that. The pandemic has uncovered the faultlines, societally speaking, for india. How does it repair those and is there a will to repair those faultlines . Let me put it this way. Absent the will, i think the country as a whole is really going to suffer. I dont think it is a question of will anymore as much as we just have to do this to hold together. It has brought out the deep social inequalities the country has brushed over the carpet in the early phases. Starklyrought out most by the fact we have such a Large Population of informal and casual workers that move from poor parts of india from poorer parts of india to regions that have seen better economic develop. We need to think about ship think the economic about shifting the Economic Strategy so it is more inclusive and better spread across the country. Also, the need for the government to think much harder and build, with full political will, a more robust insurance that covers all indians in a way that ensures protection against vulnerabilities. The biggest reality this crisis has brought to light is the fact that a significant part of india, in fact even as we moved out of poverty as a consequence of many decades of growth, is very vulnerable. A single income shock can push you back very quickly into poverty. Thats the reason why large numbers of indians, when they lost their jobs, had to find ways, even by foot, to make it home. We need to ensure we have a better, more equitable strategy for growth that ensures all of india grows equally. And, importantly, that we have a more robust social Protection System. The pandemic has across the globe highlighted the fact that the failure to invest in Robust Public Health systems leads to crises that we cannot manage, Health Crises that we find difficult to manage. The urgency of investing in health, india invests far lower in held as a percentage of gdp than any other comparative country. We need to strengthen our Health Systems to ensure a strong economy. Rishaad very quickly, we saw the migrant population go back to villages. The urban to rural migration pattern. Do you expect now for that to be rural to urban migration of the same proportion . Do you think people may stay in the villages . Very quickly. I think we are going to see two very interesting shifts. There will be a proportion that will stay in villages after all the hardships they have encountered. Economic necessity will override a lot. You will of course see movement back. I think the nature of that movement is going to change. It will be much more shorter distances to areas that are closer to hometowns. Unless we are able to build a stronger social Protection System that ensures people are able to access government benefits, no matter which part of the government they are in, and we are also able to ensure a legal regime that protects workers better than we have thus far. We will see migration back into towns, but i think the pattern of migration may see some changes on account of the experiences of the last two months. Haslinda could we see serious labor shortages in the city . We have heard from the likes of juno steel, suzuki motor raising concerns about a shortage of labor. Absolutely. Challengevery real right now, especially as we are opening up manufacturing again, partly because people have only just move back. I dont think moved back. I dont think, in light of the way the pandemic is unfolding and the chaos in terms of borders,across state it is going to be moving labor back into factories easily or swiftly. Taking the long view, there will be mobility back into urban areas, for economic reasons. This is not going to be easy. Both private capital as well as the state will need to do more to reassure labor that their basic rights and dignities will be protected when people are willing to move back and come to work. Thats the challenge many big manufacturing units are confronting today. Haslinda you talked about income shortages. The poorest people in india getting hit for a second time since 2016, first by demonetization and now by covid. Could this prolong indias recession . Yes. Dont forget, between demonetization in 2016 and the pandemic, the economy was going through a fairly significant slowdown. We recorded very low gdp growth in the last quarter of the Financial Year that just past before the pandemic hit. Key drivers of the economy went down, from automobiles to agriculture, going through a period of depression. This is pushing it further. It is unlikely we are going to recover with any speed, even as the pandemic itself runs its course. Some economists are expecting it will take at least until 2022, 2023 until the economy slowly gets back on its feet. I think there are some moments of opportunity in the crisis as the government is trying to push summer form. Haslinda we push some reform. Haslinda we have to leave it there. Imani ir from the centre for policy research. Bloomberg daybreak middle east is next. This is bloomberg. You doing okay . Yeah. This moving thing never gets any easier. Well, xfinity makes moving super easy. I can transfer my internet and tv service in about a minute. Wow, that is easy. Almost as easy as having those guys help you move. We are those guys. Thats you . The truck adds 10 pounds. In the arms. Okay. Transfer your Service Online in a few easy steps. Now thats simple, easy, awesome. Transfer your service in minutes, making moving with xfinity a breeze. Visit xfinity. Com moving today. 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 paid presentation brought to you by rare collectibles tv. Our country was founded on life, liberty, and the pursuit of happiness. 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