Transcripts For BLOOMBERG Bloomberg Markets Asia 20240712

Overnight was in the belly of the curve of the fiveyear as the fed committed to keep eyeing bonds. 10 year yield is also at the lowest in a week. You see that in the aussie markets with 10 year yields down , so belowbasis points the 1 threshold. Yen. S are bid up with the it breached that 107 mark. We are still around 10693. Hong kong dollar also breached that small and. End. Very strong side of 775 7. 75. Crude continuing the climb after the u. S. Stockpile data. Highest in nearly four years. Gold futures getting a boost from the fed. Bond yields staying low. That is helping to provide this rally. Has. Haslinda expectations of a long road to recovery. Ovishost average dub signal. Our Global Economic and policy editor Kathleen Hays is here with powerful words from jerome powell. How bad is the feds you of the economy to be so dovish . It certainly has reassured investors that the fed is going to stay for some time. I think when people saw the made jobs report of payroll at two and a half million, some of us started to think maybe they jayt the so dovish, but powell went out of his way to make it clear. When you tell the world and your colleagues are on board that you will keep the key rate in place near zero, not just for the rest of this year and next year, but a year after that, that is dovish. One of those noteworthy things that everybody thought jay powell said during the press conference. Aboute are not thinking raising rates or thinking about thinking about raising rates. Thinking about providing support for the economy. We do think it will take some time. I think most forecasters believe that. Kathleen thats jay powells way of saying, forget about it, we are not raising rates. Lets see how it looks when you could get a gander on the bloomberg. A look at the feds Economic Projections indicating where rates will go. We did not get that in march. So, this is a real different thing that we saw since the end of last year. Two whole years, unanimous, no most higher in rates. Even the third year. ,ne more thing, very important when the fed is doing whatever it takes, they will keep buying bonds and not continue to taper off weekly operations. 80 billion in treasury a month and 40 billion for securities. How did he say it, they want to keep credit flowing and sustained food market functioning, along with those that you see. Thats a pretty powerful signal. I think the quote of the day from jay powell is, we are not even thinking about thinking about raising rates. I thought it was a typo. Just how negative is the feds view of the economy to justify a long time of aggressive stimulus . Lets look at it kathleen lets look at it from another light. When you heard it, it was priceless. He said another big statement that was, Biggest Surprise ever. Its going to take a long time to get out of the hole and you have more than 20 Million People still unemployed. What bloombergs economic said, they are prepping and getting ready for a threeyear climb back to where the economy was before the virus it. Unemployment was expected to fall to 9. 3 at the end of the year. The end of 2021, but that still more than twice as high as where unemployment was at its 50 year he low. Gdp down 6. 5 , back to 5 in 2021. It went down a big hole. 5 does not even fully build that backup. The former president of the atlantic fed was on daybreak asia earlier and when i asked him, can they really keep it that low for that long . Here is what he said. Is miraculously a much better outcome in the economy, they will reconsider. There is no guarantee the policy rate will be a zero for 2. 5 years. But as they see things now, that is the way they are thinking. Important to note that as they see things dow is see things now is unanimous. What about the question of racial inequality in the economy . How does powell see the feds role in this . Lotleen he talked a broadly about wealth inequality, income inequality, saying how the pandemics impact has been , hardest on africanamericans, on hispanic workers, on women broadly. Think its interesting that the fed even went out of their way to put a powerful statement about racism in his prepared remarks. Here is what jay said. There is no place in the fed for racism, and there should be no place for it in our society. Everybody deserves the opportunity to serve to participate in our society and economy. He mentioned this is the divide that we see. Globalization, technology, if you dont end up with the kind of education that gets you there, thats a problem. But lets note that the Unemployment Rate in may was at 15. 8 for black people. It is still a historically wide gap. Do powell says what they can is make sure this economy right now grows as fast as it possibly can and creates as many jobs as it possibly can and gets unemployment down because thats what helps the load the workers on the lowest end of the latter. Yvonne i heard an economy shade shaped recovery. Thank you for that wrap up. Lets look at your first word news. Oecd says coronavirus may cause may cause a global slump. It also says the United Kingdom will be hit harder than any other leading nation with a decline of 11. 5 . And a loss of 2. 5 million jobs. The Organization Warns that any second wave could be even worse worldwide contractions. Decline the klein in global gdp that we for see in , by far, than any we have projected in the 60 wass since the oecd created. Yvonne a second wave of coronavirus cases is appearing in the u. S. The state emerged from lockdown. Texas reported more than 2500 new infections. The highest oneday total since the pandemic struck. Texas has seen four Straight Days of new infections while the latest countrywide virus tracker puts u. S. Cases at a fraction under 2 million. One than 112,000 people have died. North korea is ramping up pressure with state news saying the u. S. Is being told to stay out of interkorean issues. The report comes amid rising tensions and the north has refused to answer calls at their shared liaison office, saying they cut all communications with the south. Washington has repeatedly rejected the calls for in easing of sanctions on pyongyang. China is still buying soybeans in the u. S. , despite tensions with washington over the coronavirus and future of hong kong. Sources say state and private organizations brought 10 cargoes this month with three in the last 24 hours. Where our fears worsening relations could hurt the phase one trade deals, but the leading trader says the date the deal remains on track. Coming up, we speak to the ceo of americas biggest ship owner to find out how its coping with the pandemic. We are joined later on this hour. Hong kongs ipo hong kong has 100 companies queuing up to go public. Potentialk about a wave of Chinese Companies listing in hong kong as the u. S. Becomes a less attractive destination. More to come. This is bloomberg. Listed ine game maker hong kong and it was a strong debut. We are seeing the stock trade close to 9 right now, as much as 10 earlier here. Jd. Com aims to follow suit next week as the Hong Kong Exchange tries to attract more tech listings. Turnover on exchange is only about a quarter of the dollar value relative to its u. S. Peers. But six lets discuss all of that what the managing partner in the coleader of the firms National Public offering group. Thank you for joining us on this , give usor net ease the outperformance we have seen so far. How big of a boost is this for hong kong . Is this a sign that this is a place to list despite the Political Risk . Ward the investor appetite is high. Company andtable has a good track record. Obviously, under covid19, the Business Model is proved to be successful. Generally for hong kong you can expansion, it the called the attention of investors for the consistent forcontinuous perspective where the virus and technology has saw disruptions for Business Models. Is this could be conducted even more online. They expect to support devaluations. The two years is good for hong kong. It leads the companies in the right direction. Alibabas secondary listing opened the door for this. You have net ease, jd. Com next week. These are already three out of the four largest Chinese Companies by market caps. Do you think this is as good as it gets for the Hong Kong Ipo market . Do think it will be just as bullish for smaller and lesserknown companies . Hong kong stock shake attractinge is companies with different size and different sectors. Hong kong has lost liquidity. Investors have risk appetite. The company has exponential growth and also these Smaller Companies with higher growth. You can see hong kong had the massive pays had both local and international and regional. And also had a lot of liquidity because of the mainland and international fronts. There is somerd, concern out there whether or not hong kong could absorb all these large issuances. How deep, how liquid, how resilient is a Hong Kong Market . Over the last couple of years stock change in hong kong has been transforming to keep pace with the Global Economic departments. For example, they expanded these things to listings of their earnings and ill Tech Companies. Earnings and Tech Companies. Also the innovative companies. That we saw that in alibaba and the coming of jd. Com. The hong kongat said jane has been really looking at looking to increase the variety and also to increase the efficiency. The market had just finished the consultations regarding the listings. That allows hong kong to put in terms of listing regulations with the u. S. In terms of andacting Stock Traders company holders. And hong kong stock change now has come consultations that have begin the mechanisms. Listing kong has a above people us five. But the ipos, for example, alibaba, have been stopping us. But they are putting in part the pricing in the listings and a day. This is a potential discussion. The market we will see from the overwhelming welcome because its what investors are looking for to mitigate the risk. With hong kong becoming increasingly a battleground within the u. S. , it as well as in china, do you see hong kong becoming a Financial Hub for china as opposed to an international Financial Hub . Therd hong kong has been most deferred office listing for Chinese Companies. That means in the past, at least 10 years, more than half of listings in hong kong come from mainland to Chinese Companies. Now is that a mutual market. Companies from Southeast Asia and International Companies for asiapacific operations. As long as hong kong has been opening up in terms of the variety of companies, for example, tech stocks, there are lots of international appetites, in terms of the issues of what they would like. There is a lot of liquidity, and looking toof funds go in the markets, especially now. China is the second largest economy, and their international toue has business in china light hong kong as it pays to raise capital and expand its business into china as well. Thank you so much for the insights today. Still to come, new fears of a second coronavirus wave as lockdowns lift. We will have the latest numbers, including record infections in texas. This is bloomberg. Haslinda fears of a second wave of Coronavirus Infections as countries and states emerge from lockdowns. Texas reported to its highest numbers since the pandemic began, experts are warning against reopening too soon. Why is Anthony Fauci saying that the coronavirus outbreak in the u. S. Is far from over . Where does he see this Going Forward . I first of all, in an online, to a biotechnology group, he called the coronavirus pandemics Worst Nightmare and said its not over yet, its far from over. He said the infection will not burn itself out with mere Public Health measures, but this will stay around until there is a vaccine for the whole world. Concernedicularly that some nations or states, as they emerge from lockdown, there is still a risk that the virus could come back. Some places it has not gone and they are reopening, but other have a second wave. That is a real concern in the u. S. As it hits about 2 million more deaths than any other country with 112,000. Yvonne you mentioned there is a fear growing about a second wave in parts of the u. S. How significant could these become . Real worry. S a for instance, you see texas, which has reopened a number of restaurants and activities, but it reported yesterday 2500 new coronavirus cases, which is the highest oneday total since the pandemic emerged. We are seeing in florida, reports of 8500 new cases. Hospitalization reached their highest count level since may 13. Reopen, even as places and it feels like life is getting back to normal, we are seeing a spike in cases, and that really has Infectious Disease and medical professionals very worried. Some cases, the rising numbers are outpacing be increase of testing, raising concerns about whether the virus could be controlled. How isa in the u k, Prime Minister Boris Johnson clashing with his own government scientist over the coronavirus . Jodi Boris Johnson was put on the defensive on Live Television in the past day. He was standing next to the country chief medical officer, which called on a long list of potentially broad decisions wrong decisions that were made in dealing with the coronavirus epidemic in the u. K. The u. K. Has had the second highest death toll in the world, with 41,000 deaths, after the u. S. Boris johnson was caught in the line of fire and tried to deflect. Saying it needs to be examined in time and its too early to judge. The medical professionals, including his chief medical officers are saying that the u. K. Acted way to lay, and the numbers of death could have been cut in half by acting earlier. Our Senior International editor, Jodi Schneider with the latest. Lets look at your business flash headlines. Begins in the workforce after incremental moves and offices abroad where the coronavirus has slowed. The initial group will go back to 22nd in new york, new jersey, dallas and salek city. The ceo said returning is voluntary. You must complete a health questionnaire. Disney signature california will reopen after months of being close because of the coronavirus. Customers will need to retain disneylands to go to in anaheim and disney california. Disney world in florida will begin a phased reopening next month. It is right across the board here in asia. Markets are reacting to the fed. Investors are reassessing what powell said, a long road to recovery for the economy. The msci asiapacific index down for 10th of 1 . Take a look at where we are in terms of the dollar. Trading at a threemonth low, down with the g10 currencies affecting no change of rates. Uick check on that ease netease. 8 y start trading up about of the opening, higher by as much as 10 . Plenty more to come. This is bloomberg. Haslinda its 10 29 a. M. In singapore and hong kong. 10 29 p. M. In new york. Budgingral resort this to maintain asset purchases and sees Interest Rates near futures to at least 2022. The fed chair is using all the banks tools to help the u. S. Economy recover from the coronavirus. The fomc said it will increase its holdings of treasuries to sustain new functioning in the market. President s top Economic Advisor said he does not see systemic racism as a problem in the United States. Spoke at the funeral of george floyd, and said the white house is behavior. The president is expected to discuss this in a fundraiser. George floyds brother called on congress to act. I am tired, i am tired of pain. Pain you feel when you watch Something Like this. When you watch your big brother, who you looked up to for your whole life die, die baking for begging for his mom, ask you to make it stop. George called for help and he was ignored. Haslinda retail spending in new zealand surged after the lifting of the nationwide lockdown. Numbers remain below priebe iris levels. Purchases rose 79 at retail outlets, falling a 47 drop any 3 decline in march. The value of spending was almost 2 lower than in february. Tokyo says it will simplify next years delayed in Olympic Games taking the virus into account. Organizers say they and the ioc have agreed a basic approach to make the event more simple. They say more than 200 subjects have been identified as potential candidates for a more straightforward games. Muchdeclined to say how expenditure would be saved in such a move, if any. A quick check of markets right now. We are pretty much in the state of a consolidation phase after the fed. Nothing fresh coming through from jay powell. A seems like we are seeing little bit lower when it comes to asian stocks. Emerging markets have a dollar week is that continues to persist. Bloomberg dollar index flat. U. S. 10 year yields have stabilized after we saw a big move lower when it comes to for your basis points u. S. Basis points. But look at Southeast Asian markets. E. M. Is the big focus against the dollar weakness. We are seeing the likes of jakarta, manila and singapore lower. When it comes to jakarta, we are a week away from that bank. Malaysia is the only one higher by a fraction of a 10th of 1 . We are looking at the hang seng and mainland markets. The big ipo, or secondary doingg for netease is not much. Lower by 85 points. Csi 300 is a fifth of a percent lower. Aftert continues to grow entering that bull market and entering those 20 highs since we reached the lows back in march, has. Recovery in the shipping industry. Up over 90 since may thisaining some 40 so far month. The index is still a long way below where it was at the beginning of the year, and down as much a 70 from a peak in september. Lets check the outlook for with john, ceo of the largest shipping operation. Good to have you with us. Been pretty much driven by demand for iron ore in china and vietnam. Are you seeing improvement to drive the optimism and momentum forward in the coming month . John i think what you have to china was really the first area, the first country to do it shut down in february. So what we have seen as china now come back starting in march and april, theyre still production has continued to be strong. There iron ore inventories are very low levels. The lowest it has been in the last 10 years. Look atre starting to relatively healthy from a shipping standpoint for china. Having said that, in march, india went into lockdown. Some other countries, such as south africa and columbia went into lock down. Now we are seeing those countries slowly open back up. India in particular, which is very important to the steel industry, its the second largest steel producer in the world, is aiming at 80 to 90 for capacity for the month of june, versus 50 in april and may. We are starting to see, as these economy slowly begin to open up, we are starting to sleep freight see freight rates recover. Haslinda china announced a massive Infrastructure Spending plan to help boost the economy. How much of that will support the recovery in the business . A very bignk it is factor. China, in general, accounts for 35 of all commodities that are chip shipped. On the iron ore side, that number jumps up to 70 in Freight Movements across the globe. Coming from brazil and coming from australia. So that stimulus package at. Bout 500 billion u. S. Dollars to put that into context, post financial crisis in 2009, they spent about 580 billion. We are not far off from where they were in late 2008 and 2009. We all know that that was a big shipping. Ry bulk because it focuses on infrastructure and steel, we expect the same thing this time around. Yvonne tell us a little more about the trade patterns you are seeing. Are you seeing any changes in volumes or destinations of where your cargoes go for your commodities, in particular when it comes to commodities like iron ore, and if so, how . ,ohn on the iron ore side things have just really started to come back over the last couple of months. Volumeseeing a lot of out of australia right now. The volumes out of brazil are still beginning to recover from recover. From the beginning of the year brazil had a heavy, rainy season that interfered with production and operational constraint. Brazil, which typically does in the second half versus the first half of the year, certainly, probably not going to be any different this year as well. Thermal,ld side, both that freight has suffered, and we have really just started to see, particularly on the cold side, which is used in steel production, that is slowly coming back as india needs to begin importing again. Bloomberg markets asia. With trade tensions in u. S. And china, there is threats that they could hold purchases of soybeans, could have you seen any cancellations . Could the trade tensions derail any recovery we have seen so far . John you just hit on it. The major commodity and dry Bulk Shipping that is exported from the u. S. Is soybeans. Just like last year, china is relying more and more on importing from brazil. Brazil has been having a record year this year. The chinese have been buying a lot of soybeans from brazil. We are not into the season for u. S. Soybeans yet. That will probably start somewhere around september of this year. I think it remains to be seen, whether we have a large exported china, or if to they continue to rely on the brazilian crop. Do you see any the dryt changes to bulk sector as a result of covid19 . Look, i dont think that willrade pattern necessarily differ. Clearly we are looking for the recovery on the demand side. What i would tell you that has been interesting is that the supply side, or the number of ships that are being delivered on an annual basis, that order book right now is only 80 of the existing fleet, which is at a 20 year low. Which is very favorable for the dry bulk industry Going Forward over the next few years. What has been driving that is somewhat covid19 related. Meaning, there is a lot of uncertainty with dry bulk freight rates over the last few months. So we have not seen any large scale ordering. We have also seen a big cut back on the financial side and the availability of capital. So we are not seeing new building orders, if you will, orderis really cap that book low. As i said, it is at a 20 year low right now. They were just recently able to reform its of itsull rotation workers since the outbreak of the coronavirus. Tell us what you have learned . How many more do you have on these boards ships that are actually looking past their contracts right now . Unfortunately, we have quite a few, just like every other shipping company right now. Doing everything that we can to make sure that we keep our crew safe during this covid19 environment that we are in. In fact, we started providing ppe geared to our crew members very early january, when it became apparent, at least in china, that there may be problems. Weare very fortunate that were able to work with singapore, and singapore has been very proactive in allowing us to do the first full crew change in singapore, but it required a lot of operational and logistical issues. We had to quarantine the incoming crew for 14 days. Before they were allowed to join the ship, obviously for their own safety. Pcr, three days before the end of that quarantine to make sure we had the results before they were able to travel. They literally went into singapore and directly from the airport to the ship with full ppe gear. A lot of logistics involved, and a lot of planning. It took us about a month and a half of planning just to do that one crew change. I am optimistic other areas are opening up. It does seem hong kong will start allowing seafarers and companies to do crew changes, probably starting next week, hopefully. John, we will leave it there, thank you. Coming up, boeings grounded 737 max is set for a key test flight later on this month. Closer to taking to the skies. This is bloomberg. Yvonne boeing is hoping to stage a recertification site of the 737 max. Showing them the operating systems. Dropped after two fatal crashes killed more than 300 people. For more on this we are joined by our asia transport reporter. Sign thatod seven the 737 max is closer to being ungrounded . It looks like it is because we reported that boeing is contacting airlines who have ordered the 737 max to inform them of the changes they made in the software. Its a very strong indication that the ungrounded might be nearer than we had expected. So its definitely a very positive move, for sure. Any ideas of there when they will resume operations . The biggest challenge i would say is covid19. The groundingn happened, it was before covid19 and Global Demand was still very strong. They are now coming into a time when travel demand basically has vanished. I am not quite sure how Many Airlines will be able to take delivery of the planes when they are grounded. The airlines are already talking to plane makers right now because every cash is vital to the survival of the airlines. That will also affect how soon the 737 max comes back into operation and is delivered by boeing. Our asia transport reporter there with the latest on boeing. Take a look at stocks moving in this market. We are watching the malaysian glove maker going into the record high ahead of its earnings. We are seeing a little bit off the highs hereby 1 . But 16. 90. The demand for gloves during this epidemic. Top sports down from 9 , one of the biggest movers. This is after we learned that they are announcing the Controlling Shareholder bill will sell a 4. 5 stake at a discounted price. We are watching the tech stocks in hong kong with netease at a secondary listing. Present and its helping, even its rival tencent is up 1. 8 . Of theptical is one biggest movers. Plenty more ahead. This is bloomberg. Haslinda guggenheim says the fed has interventionists. Calls the risk asset valuations ludicrous. He shares his outlook for u. S. Markets and the economy. Its a matter of which piece of data you look at. There is a very high level of uncertainty, especially as we reopen the economy. Some 19 states now are experiencing spikes in covid incidences. Those are mostly the states that opened first. It is subject to a lot of uncertainty at this point. There is only so much the fed can do through the operation of Monetary Policy to really adjust the issues, other than to make sure that the markets are liquid , and that they basically Interest Rates at low enough so that it does not interfere with Something Like would rates, which the housing market. Good morning. You got rave reviews and global wall street was transfixed by how dead on you were in february on the decline. A ludicroust season. Its now a ludicrous 2020 with this huge an abrupt recovery we have seen. 10 you give chairman powell all the credit for this 44 move up in equities, or is there Something Else going on . Scott i think that chairman powell probably deserves the majority of the credit. I think that we were in the midst of a rally from the march 23 lows that looks like a correction in the bear markets until april 9 when the Federal Reserve announced aggressive policies in relationship to dealing with corporate credits. That has supported the rally. When you look at the correlation credit spreads relative to u. S. Treasuries and equity prices, that correlation is pretty robust and very tight. I think the fact that the fed has managed to drive credit spreads tighter, has basically to the equityort market. Basically not letting companies fail, so you may as well get involved. Where theu look at level of stocks are right now, and you look at the level of spreads and how the fed rot everything in, and they will continue buying at the same rate, is this a little bit like change. Jay powells work is done and they can be at on hold at this point because they dont need to do a whole lot more . Scott there are two issues. The first of the issues is the. Ed is stuck simply for no other reason because they have to provide enough credit to finance the u. S. Treasury. So, you asked an interesting question earlier, is there really anything the fed can do . To adjust the problems . Stuckk the fed is financing the u. S. Government because of the deficits. When you look at credit, however, if credit spreads now have been wider 40 of the time. Tighter 60 of the time. However you think about it. Its a pretty normal spread for credit. I am not sure that the fed is really finished in terms of what it wants to achieve, in terms of tightening credit spreads. I think the jury is out there. And one of the big reasons for that is we have yet to buy any Corporate Bonds under the Corporate Bond purchase programs. In time, i think there is so much demand for credit at this point from the investment probablyt, that we will end up driving credit spreads and and it will be supported by the fed. Was guggenheims global guggenheim global cio. They are poised to raise three when i billion u. S. After setting the price of shares for its secondary listing at 226 hong kong dollars a piece. It represents a 4 discount to wednesdays close in new york. Chinas secondbiggest online retailer is due to begin training next trading, on the same day it launches its online sales event. Just two months after taking the uks just eat, the Dutch Company has agreed an all stock deal to buy grubhub in the u. S. Its expected to take place in the First Quarter of next year. Around 5 billion. It will give just eat a platform in the u. S. , to take on a uber, which was also trying to buy grubhub. Expect the coronavirus follow outdated sales by more than 3 billion, with any recovery stretching into next year. It sees an adjusted loss of 55 at . 70 a share when it reports earnings, with operating income down more than 2 billion. Starbucks is considering take on demand does the economy reopens. Ride and a man in china drove the stocks forward. Its a shining light for tesla, victims on course to reach 100,000 deliveries from the shanghai plant in the first full year. Daniel says the shares could go as high as 1500 as a electric car interest in china and the u. S. Accelerate. Isill tell you what accelerating, this dollar weakness. E. M. Currencies are being fueled in asia. Look at the thai baht. 30. 86. At it has strengthened the most in a year. It is a dollar weakness story. The taiwanese dollar as well. Its basically in thai baht territory. You look at the rupiah, one of the best performers when it comes to asia fx. 13,913. The ringgit is also catching some today. We heard from the fed it has helped bring the dollar down. We expect dollar weakness to persist from here. Still to come on the next hour asia weberg markets speak to one of the worlds Biggest Software companys head. Ceo joins us with an exclusive interview in about 40 minutes. You dont want to miss that conversation, along with a check on the markets. Keep it here with us. This is bloomberg. Almost 11 00 in hong kong. Markets. Loomberg here are the headlines. Investors weighing the fed, jay powell warning of a long road back as rates will remain near zero through the end of 2022. China secondbiggest game maker jumping on its debut. Home in a weeks time. Indias response to the coronavirus how millions appear all thrown out of work. Prime minister haslinda it is read across the board. Losses in asia. Investors assessing the message from the fed overnight. Along the road to recovery from that until and news 2022. Some consolidation on the back of losses. The 10 year yield below 0. 8 . The index down. 4 . The nikkei among the biggest losers today. The biggest decline since midmay. The strong yen weighing on sentiment. The dollar yen, more scope to the downside. Csi 300, lower, down for a second day in the hang seng down. Y. 4 despite gains its trading debut, the secondary listing, 360 time covered versus 40 times for the likes of alibaba. Markets,of emerging Holding Onto Gains despite the marketsacross the major. Stocks globally posting the biggest gain in more than eight years. Kind ofc some resilience. Jay, flat. Emerging from quarantine measures, but the movement, restricted many businesses around april and may and that means growth will be hit really hard in the Second Quarter. So its down about 1 . Market that has become the most expensive stock market in asia. Threatening its prospect and of course strong buying as well. All right. Lets get a look at the bond market. There we go. Not really moving the needle. We did see some action as chairman powell sent a powerful message to keep on pumping stimulus into the economy in the u. S. Until the labor market rebounds. Even though we had that positive surprise on friday. We are not even thinking about raising the cost of borrowing. That is what we have, the 10 year yield, close to zero as the bank of japan targets that particular yield, a bit of a dollar strength, fractionally. Streak as we break the of dollar weakness of late. Taking a look at the euro, the yen going below 107, strengthening the 107. The australian daughter dollar, one dollar 27 as well. Some of the major markets, lets have a look at the first word headlines. We have a second wave of rotavirus cases in the u. S. , this is as states emerge from lockdown. Texas reporting 2500 new infections, the highest oneday total. Texas is announcing four Straight Days of infections. 112 thousand people have died in the United States. Pandemic may cause a global slump. U. K. Ast 6 even in if the will be hit harder than other leading nations with a decline of 11. 5 and the loss of 2. 5 million jobs. Warning any second wave could mean an even worse worldwide contraction. In global gdpine we foresee in 2020 is larger by far than any we have projected in the 60 years since the oecd was created. Economic data out of new zealand showing spending surging after the lifting of the lockdown. The numbers are below previrus levels. Debit card purchases actually 47 at 79 of following a drop. And lowern march, than in february. China is buying soybeans from the u. S. Despite tensions with beijing over the outbreak of the coronavirus in the future of hong kong. Sources say organizations bought 10 cargo this month with three in the last 24 hours. There are fears worsening relations could hurt the trade deal. Says the deal remains on track. That is the message from the fed, trying to send a vicious signal after a meeting where it did not make a policy change on policy. With somee here words from jerome powell. How bad is the view for the message to be dovish . It is clear jay powell sees a big cold in the u. S. Economy landscape and it is going to take time to get it out, even so, that is why an altar negative view needs a message of healing to keep the rate near zero until the end of 2022. Jay powell of course uttering some words that may go down in history as a new terminology for the fed to describe a certain kind of forward guidance. Lets listen. We are not thinking about raising rates. We are not thinking about it. We are thinking about providing support for this economy. This will take time. Most forecasters believe that. People are telling other people i am not thinking about thinking about that. I want to show you something from the bloomberg dots. Gdp, inflation, fed members say here is where rates will be. We have not gotten the since december. Probably because the economy looked wild and crazy. 2021, nobody is looking for a rate hike. Only two in 2022. A strong signal, and important as well, the fed has made it clear they are not going to do tapering of the bond purchases. They are going to do 80 billion on treasuries, 40 billion in mortgagebacked securities. They want to keep credit flowing to households and businesses and sustain market functioning. Pedal to the metal on all fronts. Rishaad wow, kathleen. It shows how bad the view is of the economy to really perpetuate such a long stimulus. It triageulus or is or blood transfusion . Kathleen a great question and analogy when you say the u. S. Economy has been traumatized by the pandemic. Powell, hisant jay mind is not changed by the gain in payroll in may. Over 20 Million People without jobs. It will take time to get them back to work. Bloomberg abenomics, the fed is getting ready for a three year climb out of that hole just to get back to where the economy was. Unemployment falling to 9. 3 . It iss better than where now. 6 2021. Gdp down 6. 5 this year. Rebound next year. Him,s lockhart, i asked can they guarantee they are not going to raise rates for two and half years . Here is what he said. Outcome a much better in the economy. They will reconsider. There is no guarantee that the policy rate will be at 04 two and a half years. As they see things now, that is the way they are thinking. Kathleen important to know where the feds right now can be unanimity ofthe the vote. Nobody voted against it. Right now they are all on board. In thel see this hole economy, this slow climb and they are ready to do whatever it takes, like the Federal Reserve has never had to do in modern history, to get out of it. Much,d thank you so kathleen. Coming up, one of the worlds biggest shoemakers telling us how it is weathering the coronavirus pandemic. Show foroins us on the an exclusive interview. Next the prospects of a recovery in asia. What one economist says. This is bloomberg. The Federal Reserve long ande is a uncertain road to full recovery in the United States. Will bet says rates zero until 2023. He is a senior economist. Oft is perhaps a level consensus with regard to how long rates will be at zero. Nowe look at the plot, negative Interest Rate predictions are there. Absolutely. Is key takeaway for the fed it is committed to keeping rates low. Not just this year but the year after. That he is statement not even thinking about thinking about raising rates. That is the forward guidance. Rates will stay much longer. There was some discussion of the yield curve. I think for us in asia, and emerging markets, the takeaway is not just the price of the dollar staying at zero, and beyond 2022, and the current of 40r the securities billion for months will continue. That is going to be supportive of the u. S. And to help us recover and you can see the fed is optimistic. That is one of the reasons to keep this. Also in asia, in emerging markets, since the 20th of march when the dollar index was at softened dollar has significantly. That is a consequence of this significant easing of the fed. Expanding the Balance Sheet by 3 trillion. That is going to not just u. S. Markets, but beyond in terms of the risk curve. Rishaad is that the main transmission mechanism for you . The dollar weakness and does the dollar get weaker . Trinh absolutely. The dollar is important. In terms of Financial Markets support, if you look at the fed, that is 800 trillion per year. That is a significant amount. The fact we have trade financing, not just investors coming back to emerging markets. We see the flows and the bonds have rebounded and also equities are coming back. The second part is important, the fact the reduction of the dollar is going to help with trade financing. Trade financing is important. When you look at the risk model, the appreciation of local torency is going to lend emerging markets. That next part we are going to be very supportive. One of the reasons why if you look in asia, the recovery has been the sharpest. That is because it is one of the most affected by these global dollars shortage and as a result it will recover the most. Sense of the market is the fed will backstop Asset Classes no matter what. For the markets. The fed is not going against that thinking. Is the market right in adopt in the strategy given where ecodata is right now . Sure if i i am not heard you correctly talking about the diversions of the market. The Financial Markets are pricing not just the current but also the future outlook expectations. In terms of economic data, it is always lagging. Gdp is three quarters lag. Data. E china it is lagging. Disconnect,k at the part of it has to do with liquidity in the market. Marketcause the stock and Financial Markets are looking into the future when we are getting the data that happened already. In the first half of the Second Quarter. Market looking beyond the Second Quarter into the third and fourth order. How are we going to recover from covid19 . Is it a depression . If it is a suppression, we are going to have normalization of activities. There are some encouraging signs with china that basically got covid first. It is normalizing. It is improving. It is not where it was before covid. Improving. That is part of the optimism and the question is is it too optimistic or not . Lets talk about that recovery. In the shortterm it has been dismissed. In the longterm it looks well. The mediumterm is uncertain. What is your take . For a fact in asia the Second Quarter will be the worst. China, the first order was the worst. That is the world story. What has been the response so far . You know it is aggressive, the fed, the ecb, monetary, fiscal, fora increasing its quota financing for local government substantially. And in asia across the board, significant fiscal stimulus. That is going to filter in in the fourth quarter. Insofar as we emerge, we are going to have an improvement of three tripled these. One of them is as a consequence covid, a rising level of debt, all of this easing is not just free money. It is leading to governments and it requires some takeover. That means an expansion of the government. That is a lori. The second is, of course we need it to be productive. Aboutcond is the worry deglobalization as you can see the u. S. China conflict and even before this, china vertical integration also causing destabilization. And demographics. Talking about downside risk, the fact we are improving. Theres always going to be issues. The region will recover. We are not going to recover to the trend growth rate we had before. We will recover at a lower level. Rishaad i want to get your view as to what we have with regard itself. Conomy we have seen what the markets have been doing. Equity markets in particular. What are they looking at . Shaped bounceback . What is your take on how bad things are and could get before they get better . Trinh i think things are pretty bad as they are. They are ready good pence on where you look. Great for retail, tourism, and transport. Even if we have normalization of activities, may be retail will recover. Transport and tourism will recover in a different way. We have to live with covid. I think there is a negative is disproportionate. And also if you look at whats happened, the support is only as as to where it is needed. That is one of the reasons why you need targeted policy. That is where fiscal steps in. You see more signs in that area. Indonesia is the latest fiscal, this. Ird is about they are trying everything they can to plug the gap. Its difficult to completely plug it. Way allies activity. Rishaad always a pleasure trinh. Kong, weve got the hong kong dollar, the strongest against its u. S. Counterpart. For quite a few weeks now. It is all down to three months level sincewest 2017. One month, 13 basis points down. The lowest since 2017 as well. The hong kong dollar just weakening a tad as the Monetary Authority really wanted. Indeed they put up a defense of it which it 6. 2 billion u. S. Dollars. This is bloomberg. Haslinda a quick check of the latest business headlines. Boeing hoping to stage a recertification later this month showing regulators the planes upgraded system. It has been halted since march of last year. Reduction resumed last month. 1000 per share for the first time as demand and china drove the stock forward. Some say it is a shining light for the company with tesla on course to receive 100,000 deliveries in its first full year. As high as 1500 as interest in china and the u. S. Accelerates. A new report into the state of soccer says clubs will take a from thebillion pounds coronavirus. The premier league has been suspended since march and three toths of no gain is expected drag on revenues. The season is to resume in the coming days, several clubs having opposed cuts. Athaad lets take a look the markets in china as we go toward the lunch break. The story of a move to the upside and a contrast we have seen elsewhere in the region. China makes up 1. 4 , good gains the last couple of days to the upside. Really against this backdrop of bond yields. Really hurt some of the companies that have debt there as well. That is where we are at the moment. As we go to lunch, we get japan coming back into the fray after this very short break. This is bloomberg. Its almost 11 30 a. M. In singapore. The Federal Reserve is pledging to maintain its current pace of asset purchases as these Interest Rates near zero to at least 2022. Chairman jay powell is also committing to using all the banks tools to helping u. S. Economies recover. The fomc said it would increase its holdings to treasury and mortgagebacked securities to move functioning in the markets. Failure ys the governments around the globe must institute wide range reforms. Do the emergency spending too soon, advising more stimulus may be needed to boost income and cut unemployment. , wants taxes regulation and competition. Tokyo says it will simplify next years delayed Olympic Games to take the effects of the virus into account. Organizers say they and the ioc have agreed to make the event even simpler. Than 200 subjects of been identified as potential candidates for a more straightforward gain. They declined to say how much would be saved in such a move, if any. The governor of tokyo says she is hoping to list the coronavirus alert from the cities, and moved to stage three of reopening, which would ease some business restrictions. She also told her she is not the possibility that the olympics could be canceled. She spoke exclusively to our colleague shery ahn. Mediumsized enterprises, which account for 99 of companies in tokyo is essential to the recovery of tokyos industrial base. They have been strongly affected by the coronavirus. Many and various measures to support those. Supporting the restaurants to begin delivery services. Shery you have also talked about building tokyos wall street, right . Whate are really curious is happening on that front, whether you are trying to attract hedge funds from other Financial Hubs, like hong kong. In asia, tokyo is one of the biggest headquarters, financial headquarters. We are ready to welcome all people, and all those professional people from all over the world. Can resume those Financial Exchanges and financial activities more actively. At theare you looking possibility that the Tokyo Olympics next year could get canceled . Yuriko no, of course not. Just yesterday there was a teleconference about how to carry out the 2020 olympics next year. And, it was decided that the games should be much simpler, expensive and having peoples acceptance. We are preparing for that. Of course, the tokyo 2020 games can become a symbol of how the world has decided to overcome hardship, and how humanity has strengthened. We will continue to do our best in the fight against this Infectious Disease. In order to hold a safe and secure tournament, with the cooperation of tokyo residents and people, it is necessary to optimize and rationalize the service. Ery Tokyo Olympics are planned for next year. I need to ask whether you will be hosting them as the governor of tokyo. We do have the gubernatorial elections coming up in july. Yuriko hosting the Olympic Games after so many years in tokyo, people are looking it, as wellnjoying as athletes in the world. As i told you, we have to fight first ofhe coronavirus all, and to put the 2020 as the goal. You have been praised on your response and handling of the coronavirus in tokyo. If you get another four years, what do you hope to achieve . And to i am so busy, fight with the coronavirus for the time being, but im sure is the most sustainable city in the world. Tokyo has a lot of possibilities for the future. Coronavirusinst the today, and to prepare for the second wave, is the most important key to keep tokyo and keep on growing up. That was tokyos governor speaking to shery ahn. Shares gaining on the hong kong debut. Retaila covered by the offering part of it, at least 360 times recovered. Seeing it move up by 8. 3 at the start of trading. Lets get more with our Bloomberg Intelligence analyst. The company is off to a strong start on this debut. At least this allocation is taking place. What do investors like so much about the business . Netease is a game developer and publisher. Risk hitt and and miss risks for new game, as well as the potential end of lifecycles for old games. Has is a very strong twentyyear track record of both maintaining its franchise titles, as well as rolling out the new titles that have been very successful. But the portfolio is very diversified. If one or two games comes to the end of the lifecycle, it would not impact the company too much. It is very stable and one of the for the company is giving up 30 of its net income in fordend every quarter, investors who are seeking yield. Alibaba and jd. Com now have hong kong listings, are expectations of u. S. Companies coming home . I think the regulatory scrutiny from the u. S. Side is the cousin of Chinese Companies still over there. There have been threats of further delisting of Chinese Companies do not submit themselves to all the checks within the u. S. This could happen three years down the road. Time, hong kong has been changing its rules to allow these things, which most of these Tech Companies have. If you look at the speed that and alibabajd listings have, they have expedited. It is really quick and convenient for them to do it. The attraction for coming back is rising. Of the investors in this part of the world, they know this well and they use the services of these companies. Potentially there could be improvement up by listings in hong kong. Haslinda our bloomberg intelligent asia senior analyst. Still to come, the ceo tells us how the biggest shoemakers coping with the pandemic amid lockdowns and supply change disruptions. Dont miss out, this is bloomberg. Is one of theil worst hit sectors among the ongoing crisis. On supply chain has been rising as sellers struggled to move goods across the globe. Our next guest is one of the biggest full bill footwear companies. Ata is a familyowned business serving more than one Million Consumers a day. It sells 100 million pairs of shoes a year. Nasard joins us exclusively. How has the virus impacted bata globally . Which markets have been the worst hit . Else inlike everybody the industry, we have been hit quite significantly. And a consumer standpoint from the supply standpoint, as you just mentioned earlier. You have the fx of the lockdown, which are direct fx when consumers dont go to stores when they are closed. There is the aftermath of a lot delegates to macroeconomics and consumer confidence. More importantly, the changed Consumer Habits that might be structural. It is an intensive time of learning and eight period and a period were we have to organize fragilitys. In terms of agile, how did you adapt . Alexis we have to add data different levels. We always start with the consumer, which is our focus fundamentally as a company. First is, how are we going to adapt to the changing Shopping Behaviors of consumers. How quickly and how frequently are they going to return to our stores . Number two, how do we make sure that we offer our products to them, wherever and however they choose to shop . Whether it is online or offline. Thirdly is what kind of products are they going to see, and how different is that from the kind of products they were seeking before the crisis . Last but not least, what is their attitude towards money and pricing, and how would we adjust our offering accordingly . Then you have the impact of the organization internally, beyond product and markedly. Marketing. How are we going to become a faster learning organization. . The way we organize ourselves, the way we make decisions, the way we get closure on decisions and the way we execute them. We are needing to exercise agility, whether its mentally, strategically, operationally, or organizationally. Haslinda the Retail Sector has despitetty much good disruptions in the Global Supply chain. With a economies emerging from this lockdown, how much of the Global Supply chain is back from your observation . Alexis we are having to deal with a very unprecedented we are having a supply shock and demand shock at the same time. At this stage, the impact on supply change is manageable for us. Rawuse we are having a very footprint as a company, and our sourcing is extremely broad. We source from nearly 12 countries around the world and we are not overly dependent on that. Country. Particular what an half of our production comes from our own factories. We have 23 factories disseminated around the world. I would say from a worldclass standpoint when it gets to sourcing and supply chain, we are diversified from an external supplier standpoint, and we have a good risk when it comes to sourcing our own shoes from our own factories as well as the external price. Rish in hong kong. I just want to get a sense of the adjustments you are making fashion wise. Do you think fashion trends have changed from this pandemic . Alexis it is a very good question. It is also another thing that many of our competitors are grappling with. You look atis, when the fashion world in general, not just footwear, but apparel as well, you have seen over the last 15 years, a trend towards casual eyes nation casualization where people are less formal in the workplace and social events. That applies to the way people dress and the type of shoes they wear. In the industry, people are wearing more and more, what we call, athleisure shoes and speakers. This sneakers. This is why you see sneakers growth has been five times faster. We are seeing it a lot with the booming athleisure and sneaker type of categories. Have been very, very busy preparing for that. I would like to say we are making good products good strides in that direction. One of the good things about our company is that our risk profile, in such instances, is relatively robust. From the Product Offering standpoint, we offer one of the broader collections you can find in the country. From the price standpoint we can be in the belly of the market. , whetherall channels its wholesale or online, and within aisle 9 we also offer the services from our own platform and thirdparty online platforms. Lastly, we are spread over 70 companies countries. Our risk profile is pretty robust. In pakistan in bata isar, bata if such a well known name, how are you doing in those markets . The second biggest shoemaker by volume, but how do you keep your brand relevant . It has dropped off the radar in many other parts of the world. Alexis we are doing very well in both of these countries. We have leadership positions, and during this crisis, if anything, because i dont have recent data on that front, if anything, we have widened our market share. We are very wellpositioned in these markets, and that is banks to efforts in modernizing our shopping experience, modernizing and making our footwear a lot more relevant, and connecting to consumers via our marketing platforms. When it gets to a how do we have the brand within its positioning , and how do we make sure to ,tay relevant with consumers the way you stay relevant with consumers is priority a, b and c, making sure you offer them products that are relevant. It sounds like a platitude, but this is the most frequent mistake the book and make in our category. We are making sure we are offering our consumers the type of roddick they are looking for. That is really a combination of clients. And then, how do we get insightful communication to our consumers to make sure we resonate with them. The southk to continent, we have data that shows our average consumer by four years. We are connecting with a younger consumer base. Exis, you pit on hold your Expansion Plan for india because of the coronavirus. When might those plans come into fruition . When are you looking at expansion over the next 12 to 24 months . Alexis we will resume expansion much or earlier than 24 months. In india andullish are will position in india and we will resume as soon as business goes back to normal. Clearly, with such a disruption that this pandemic has created, the nature of the expansion and the exact execution profile of this initiative will differ and will you involve. We might choose to open stores regions,ent types of we might choose to over emphasize online in some parts of the country, and that logic is applicable to every where we operate. Clearly, india is one of our largest markets. This is where we operate. Haslinda thank you for joining us today. What a pleasure. Bata ceo joining us. Just to give you a headline coming through, u. S. Coronavirus cases surpasses the 2 million mark, even as the country emerges from that lockdown. Taking a look at where we are in terms of the futures, expanding its losses, coming down about 1 on the back of what the fed said about the outlook of the economy. , long road toong recovery. Plenty more to come. Keep it here with us. This is bloomberg. Haslinda the coronavirus pandemic has triggered a way for a political turmoil in several countries. India can be added to the list. For the First Time Since modi became Prime Minister, he is losing support among his base. It is largely made up of Migrant Workers and they were hit hard by the virus. Lets bring in the government editor in new delhi. Seemed from modi unshakable. What has changed . Modi has had higher Approval Ratings for his handling of the virus, and he retains a solid majority in the national parliament, but it looks like he is now going to struggle to obtain support from the Migrant Workers. They make up nearly a fifth of indias workforce, their anguish has been a constant backdrop of the indians coronavirus response. Locked the country down with just hours notice, and that left millions of people jobless, homeless, and with no support. Rishaad there is an election coming up. Could the anger build into some kind of challenge for the ruling party . Ruth it looks like this election, which needs to be held by november, will be the first check for modi coming out of this coronavirus lockdown. They have the countrys largest source of migrant labor, so the workers who say they are angry with modi for letting them down and for not helping support them during the lockdown. They had a coalition that party and ais shift in attitude among the voters could have an impact on the outcome. Indias lockdown has largely failed in major cities like mumbai and delhi. Now, the prolonged unemployment that it has caused, particularly among migrant laborers, is starting to increase tensions in the countryside. Rishaad this is it, with proximity in the cities, its impossible to get social proximity. Could all these warnings lead to social unrest, and have we seen any fresh outbreaks so far . There has been social unrest in several states around india during the lockdown. In the commercial city, which is s homestay, police have fired tear gas at protests. There have been five separate clashes over the couple of months as migrant laborers demand them to help them return to their villages. Now there are outbreaks among villagers as they are working from home, needing a lot of support, and also bringing the virus with them. Ruth, our south asian in new delhi. Itor lets move to the headlines. Britainsonths after just eat for 8 billion, the ist the Dutch Company buying grubhub in the u. S. Grubhub is valued at around 5 billion. The deal will give them a platform in the United States to take on uber. Trying to buy grubhub as well. Deutsche bank loans revisions will rise to the highest as it grapples with the economic slowdown because of the pandemic. Saying, money set aside will reach more than 900 billion in the three months to the end of june. Thats the most since the Global Financial crisis. The bank does expect provisions to start decreasing in the next quarter. Haslinda looking ahead at the markets. Right now, losses across the board. Asia is down. The message from the fed. Its a long road to recovery. Expectingry policy is expected until 2022. Nikkei 225 down 2 . The biggest decline since we have seen since may. See a downside. The hang seng down 1 . Netease making its debut, up about 8 after opening 10 earlier. Well, nifty is down for 10th of 1 . That is it from Bloomberg Markets asia. Daybreak middle east is next. Keep it here with us. This is bloomberg. The following is a paid program. The opinions and views expressed do not reflect those of bloomberg lp, its affiliates, or its employees. The following is a paid presentation brought to you by rare collectibles tv. Narrator in a letter dated december 27, 1904, to the secretary of the treasury, president Theodore Roosevelt with a short, twosentence letter in typical, Theodore Roosevelt, direct, bravado style. My dear secretary shaw, i think our coinage is artistically of atrocious hideousness